THE  UNIVERSITY 

OF  ILLIN©!^ 

LIBRARY 


04SS>b 


ILLINOIS  HlStDRlCAl  SURVEY 


THOMAS  DYER,  FIRST  PRESIDENT  OF  THE  BOARD  OF  TRADE 


HISTORY 


OF  THE 


BOARD  OF  TRADE 


OF  THE 


CITY  OF  CHICAGO 


EDITED  BY 

CHARLES  H.  TAYLOR 


IN  THREE  VOLUMES 
Illustrated 


VOLUME  I 


CHICAGO 
ROBERT  O.  LAW  COMPANY 

1917 


PRINTED     AND     BOUND     BY 
ROBERT   0.    LAW    COMPANY 


^.  :W^.  A~-~^ 


\ 


V, 


I 


PREFACE 

N  the  preparation  of  this  History  of  the  Board  of  Trade,  two 
objects  have  been  kept  steadily  in  view:  First,  the  production 
of  a  connected  story  of  the  origin,  development,  and  activities  of 
the  organization,  which  from  small  beginnings  in  a  little  frontier 
town,  became  within  half  a  century  the  most  influential  commercial 
body  on  earth ;  and,  second,  the  preservation  in  accessible  form, 
of  such  statistics  as  should  make  the  History  forever  valuable 
as  a  book  of  reference. 

The  development  of  the  Board  of  Trade,  and  the  growth  of  the 
City  of  Chicago  itself  were  so  intimately  associated  with  the  settle- 
ment of  the  Northwest,  and  so  dependent  upon  it,  that  some  knowl- 
edge of  the  conditions  under  which  the  American  occupation  of 
this  vast  territory  was  accomplished,  seemed  indispensable.  A  full 
presentation  of  this  historical  background  required  a  brief  sketch 
of  the  Old  Northwest  Territory,  including  a  view  of  the  advancing 
wave  of  population  which  overspread  Ohio,  Indiana  and  Michigan 
while  the  region  west  of  Chicago  was  still  a  wilderness  inhabited 
only  by  Indian  savages,  with  the  sole  exception  of  the  French 
'**         settlement  on  the  American  Bottom  below  St.  Louis. 

The  early  French  explorers  had  no  influence  upon  the  Board 
_         of  Trade;  but  Marquette  and  Joliet  are  worthy  of  mention  as  the 
first  civilized  men  whose  eyes  rested  upon  the  Chicago  "Portage," 
and  LaSalle  as  the  first  great  dreamer  who  foresaw  the  possibilities 
^  of  the  agricultural  region  which  eventually  raised  a  great  metrop- 

ft>         olis  where  rail  and  water  meet,  and  forced  the  amazing  growth  of 
J  The  Board  of  Trade  of  the  City  of  Chicago.     While  everything 

prior  to  the  location  of  the  Illinois  and  Michigan  Canal  with  the 
Chicago  River  as  its  northern  terminus,  is  in  a  certain  sense  irrele- 
vant, and  while  to  some  the  facts  are  so  familiar  as  to  appear  trite, 
it  is  believed  that  to  many  the  recital  will  prove  interesting. 

The   commercial    development   of    Chicago   began    before    the 
organization  of  the  Board  of  Trade ;  and  as  the  latter  included  in 
its  early  membership  men  engaged  in  nearly  every  vocation,  it  has 
been  deemed  essential  to  chronicle  the  first  attempts  to  expand  the 
j^  general  business  of  the  city,  as  well  as  the  first  traffic  in  those  com- 

modities  which    in   later  years    were   handled    exclusively   on    the 
J  Exchange.     How  the  little  town,  first  laid  out  by  the  Canal  Com- 

missioners in  1830,  grew ;  why  it  could  grow  only  as  the  tributary 
country  became  occupied  by  farmers,  and  how  the  gradual  unfold- 
ing of  resources  from  an  ever-widening  area  sustained  the  faith  of 

5 

»r 

o 


6  PREFACE 

the  settlers  from  1830  to  1848,  surely  are  part  of  the  history  of  this 
commercial  development,  and  therefore,  of  the  Board  of  Trade. 

The  early  struggles  and  slow  growth  of  the  Board  after  its 
organization  in  1848,  have  been  well  described  by  Elias  Colbert 
and  others ;  but  most  of  the  material  used  in  preparing  this  history 
of  the  thirteen  years  preceding  the  Civil  War  was  obtained  from  the 
newspapers  of  the  period,  the  only  original  source  now  available. 

Even  in  its  youth,  the  Board  of  Trade  had  the  courage  of  its 
convictions,  and  was  ready  to  express  its  opinion  upon  public 
questions.  All  walks  of  life,  all  social  grades  and  nearly  all  nation- 
alities are  represented  in  its  membership.  It  is  not  composed  of 
saints  exclusively,  nor  of  sinners.  Every  candidate  for  member- 
ship must  undergo  the  examination  of  a  committee,  and  satisfy  them 
not  only  of  his  financial  responsibility,  but  of  his  good  business 
reputation.  As  a  result  of  care  in  guarding  its  portals,  and  strict 
enforcement  of  its  stringent  rules  of  business  conduct,  there  is  on 
the  Board  of  Trade  of  the  City  of  Chicago  as  high  a  standard  of 
commercial  honor  as  obtains  anywhere  on  earth.  Its  history,  so 
far  as  domestic  legislation  is  concerned,  is  largely  a  record  of  per- 
sistent action  by  the  majority,  to  compel  a  turbulent  minority  to 
observe  open-handed,  fair-dealing  methods  of  business  in  their 
relations  with  the  public,  as  well  as  among  fellow  members  of  the 
Association.  The  epoch-making  requirements  for  the  grading, 
weighing,  storage  and  shipment  of  grain  in  bulk,  which  were 
adopted  early  in  the  Board's  history,  and  contributed  so  largely  to 
its  supremacy  in  this  department  of  commerce,  were  prompted  by 
this  motive,  and  the  same  is  true  of  the  long  fight  to  compel  rail- 
way companies  to  discontinue  the  practice  of  granting  unfair  freight 
rates  to  certain  favored  shippers. 

The  Editor  hereby  expresses  his  obligation  to  Elias  Colbert, 
author  of  the  earliest  reliable  history  of  Chicago  (1868)  and  veteran 
commercial  editor  of  the  Chicago  Tribune,  for  valuable  suggestions, 
both  as  to  matter  and  form  of  expression ;  to  Miss  Caroline  M. 
Mcllvaine,  Librarian  of  the  Chicago  Historical  Society,  for  the 
privilege  of  consulting  records;  and  to  Miss  Valentine  Smith, 
late  Archivist  of  the  City  of  Chicago,  for  assistance  in  relation  to 
the  annals  of  the  early  French  period,  and  to  Frederick  W.  Meyers 
who  has  written  most  of  the  history  of  the  years  subsequent  to  the 
close  of  the  Civil  War,  and  who  has  given  nearly  a  year  of  faithful 
work  to  its  preparation. 

Hoping  that  the  History  of  the  Association  will  be  satisfactory 
to  his  fellow  members  of  the  Board,  and  thus  repay  him  for  the 
labor  expended  in  its  preparation,  the  following  pages  are  sub- 
mitted by 

The  Editor. 


BIBLIOGRAPHY 

Author  Title  Abbreviation 

John    Fiske "The  Discovery  of  America" Fiske 

A.  T.  Andreas "History  of  Chicago" Andreas 

William  H.  Keating "Narrative  of  an   Expedition   to 

the    Source    of    St.    Peter's 

River    &c." Keating 

Gurdon  S.   Hubbard "Autobiography  of  Gurdon  Sal- 

tonstall  Hubbard"   Hubbard 

Justin  Winsor "Narrative  and  Critical  History 

of  America"    Winsor 

Lt.  Col.  John  R.  Bailey.  ."Mackinac"   Bailey 

Thwaite's  Edition "Jesuit   Relations" Thwaite 

John  Reynolds "Pioneer  History  of  Illinois". .  .Reynolds 

M.  M.  Quaife "Chicago    and    the    Old    North- 
west"    Quaife 

J.  S.  Currey "Chicago,  Its  History  and  Build- 
ers"     Currey 

Clarence   Edwin  Carter.. "The  Illinois  Country" Carter 

Edward  G.  Mason "Chapters  from  Illinois  History".  .Mason 

N.  D.  Harris "Negro  Servitude  in  Illinois" Harris 

John  Armstrong "Notices  of  the  War  of  1812".  .Armstrong 

Rufus   Blanchard "Discovery  and  Conquest  of  the 

Northwest,  with  Chicago".. 

Blanchard 

Thomas  Ford "History   of  Illinois" Ford 

Moses  and  Kirkland "History  of   Chicago" Moses 

William  Bross "History  of  Chicago" Bross 

Elias  Colbert "Historical  and  Statistical  Sketch 

of  Chicago"    Colbert 

H.  H.  Hurlbut "Chicago   Antiquities" Hurlbut 

David  R.  Dewey "Financial  History  of  the  United 

States"    Dewey 

H.  von  Hoist "Constitutional    History    of    the 

United  States" Von  Hoist 

7 


TABLE  OF  CONTENTS 


CHAPTER  I— PAGES  17-88 

Brief  history  of  the  region  now  tributary  to  Chicago,  also  show- 
ing why  this  city  has  become  the  great  food  market  of  the  continent. 

PAGE 

Spanish    Claims    17 

French  and  English  Colonization 18 

Chicago  Watershed 20 

Portage    21 

Earliest  Records 23 

Eighteenth  Century 29 

English  Rule  33 

English  Oppose  Settlement 33 

Revolution    35 

After  Revolution 38 

Rights  and  Wrongs  of  Indians 41 

Early  Settlers  45 

Fort  Dearborn    47 

Site  of  Chicago 50 

Life  at  Fort  Dearborn 51 

Tecumseh  and  the  Prophet 52 

Michigan  and  Illinois  Territories 53 

Tippecanoe   53 

Acts  of  Violence 54 

Garrison  Quarrels    55 

John  Kinzie  55 

Indentured  Servants   56 

Captain  Heald 59 

Tragedy  of  August,  1812 63 

War  of  1812  78 

After  the  War   81 

State  of  Illinois 84 

9 


10  TABLE  OF  CONTENTS 

CHAPTER  II 

PAGE 

Chicago  in  Transition 89-116 

Five  Years  of  Depression   99 

Wholesale  Trade   110 

CHAPTER  III 

The  Modern  City 117-134 

Imports  and  Exports,  1847 127 

Migration    130 

Chronological  Table   (1843-1848)    133 

CHAPTER  IV 

Beginning  of  the  Board — The  Voluntary  Association — The 

Legal  Organization   135-274 

1848— Thomas  Dyer,  President   135 

1849— Thomas  Dyer,  President   150 

1850— Charles  Walker,  President   159 

1851— Charles  Walker,  President 165 

1852 — George  Steele,  President   172 

1853 — Thomas  Hale,  President 175 

1854— George  A.  Gibbs,  President   i 186 

1855— Hiram  Wheeler,  President 201 

1856— Charles  H.  Walker,  President 216 

1857— Charles  H.  Walker,  President 225 

1858 — Julian  S.  Rumsey,  President 237 

1859 — Julian  S.  Rumsey,  President 256 

1860— Ira  Y.  Munn,  President 265 

CHAPTER  V 

The  Board  of  Trade  During  the  Civil  War 275-338 

1861 — Stephen  Clary,  President   275 

1862— Calvin  T.  Wheeler,  President 289 

1863— John  L.  Hancock,  President .' 299 

1864 — John  L.  Hancock,  President 306 

1865 — Charles  Randolph,  President   322 


TABLE  OF  CONTENTS  11 

CHAPTER  VI 

PAGE 

From  the  Close  of  the  War  to  the  Great  Fire  in  1871 339-449 

1866— John  C.  Dore,  President 339 

1867— Wiley  M.  Egan,  President 347 

1868— Enos  V.  Robbins,  President  360 

1869— Jesse  M.  Richards,  President  Z77 

1870— Samuel  H.  McCrea,  President 396 

1871— Josiah  W.  Preston,  President 423 

CHAPTER  Vn 

From  the  Great  Fire  to  the  Resumption  of  Specie  Payment 

in  1879  450-596 

1872— Josiah  W.  Preston,  President  450 

1873— Charles  E.  Culver,  President   474 

1874— George  M.  How,  President 500 

1875 — George  Armour,  President   514 

1876— John  R.  Bensley,  President   526 

1877— David  H.  Lincoln,  President   544 

1878— Nathaniel  K.  Fairbank,  President 561 

1879 — Asa  Dow,  President   577 

CHAPTER  Vni 

From  the  Resumption  of  Specie  Payment  to  the  Columbian 

Exposition    597-853 

1880— John  H.  Dwight,  President 597 

1881— Henry  W.  Rogers,  Jr.,  President   609 

1882 — Ransom  W.  Dunham,  President 635 

1883— James  B.  Hobbs,  President 658 

1884 — E.  Nelson  Blake,  President 687 

1885— E.  Nelson  Blake,  President 707 

1886— A.  M.  Wright,  President 724 

1887— A.  M.  Wright,  President 739 

1888— C.  L.  Hutchinson,  President 764 

1889— AVilliam  S.  Seaverns,  President 782 

1890— \\'illiam  T.  Baker,  President   797 

1891— ^^•illiam  T.  Baker.  President   817 

1892— Charles  D.  Hamill,  President 835 


12  TABLE  OF  CONTENTS 

CHAPTER  IX 

PAGE 

From  the  Columbian  Exposition  in  1893  to  the  Present 854 

1893— Charles  D.  Hamill,  President 854 

1894 — Charles  L.  Raymond,  President 872 

1895— William  T.  Baker,  President  892 

1896— William  T.  Baker,  President   913 

1897— William  T.  Baker,  President   932 

1898— Zina  R.  Carter,  President 953 

1899— Richard  S.  Lyon,  President 975 

1900— William  S.  Warren,  President 991 

1901_William  S.  Warren,  President 1014 

1902_William  S.  Warren,  President 1034 

1903— Reuben  G.  Chandler,  President 1050 

1904 — William  S.  Jackson,  President 1069 

1905— William  S.  Jackson,  President 1081 

1906— Walter  Fitch,  President  1096 

1907— Hiram  N.  Sager,  President 1115 

1908— Hiram  N.  Sager,  President  1132 

1909— John  A.  Bunnell,  President 1144 

1910— A.  Stamford  White,  President  1153 

1911— John  C.  F.  Merrill,  President 1162 

1912— Frank  M.  Bunch,  President   1177 

1913— Edward  Andrew,   President    1186 

1914_Caleb  H.  Canby,  President  1194 

1915— Caleb  H.  Canby,  President  1213 

1916— Joseph  P.  Griffin,  President 1234 

1917_joseph  P.  Griffin,  President 1249 


ILLUSTRATIONS 

Thomas  Dyer,  First  President  of  the  Board  of  Trade .  .  Frontispiece 
First  Shipment  of  Grain,  Chicago's  First  Dock. .  .Facing  Page  113 

Earliest  Commercial  Letter Facing  page  217 

Seth   Catlin,   Secretary  of   the   Board    of    Trade, 

1858-63   Facing  page  257 

Chamber  of  Commerce,  Board  of  Trade  Building 

Destroyed  by  Fire  of  1871  Facing  page  433 

Early  Board  of  Trade  Building Facing  page  433 

Temporary  Offices  of  Prominent  Board  of  Trade 

Firms  After  Fire  of  1871  Facing  page  448 

Laying  Corner  Stone  of  Board  of  Trade  Build- 
ing, 1872  Facing  page  461 

Temporary  Meeting  Place  of  Board  After  Fire  of 

1871    Facing  page  461 

Board  of  Trade  Building  Erected  1872 Facing  page  464 

Present  Board  of  Trade  Building Frontispiece,  Vol.  2 

B.  P.  Hutchinson  Facing  page  771 


PUBLISHER'S  NOTE 

No  effort  or  expense  has  been  spared  to  make  this  the  most  com- 
plete and  satisfactory  history  of  a  commercial  organization 
ever  published,  and  the  great  mass  of  detailed  information  which  it 
contains  has  made  it  impracticable  to  insert  a  complete  index  which 
would  not  defeat  its  own  purpose  by  its  bulk.  Volume  One  is  de- 
voted largely  to  an  interesting  and  authentic  history  of  Chicago  and 
the  conditions  which  made  it  the  great  market  place  of  the  continent. 
The  history  of  the  Board  of  Trade,  on  succeeding  pages  of  Volume 
One  and  Volume  Two,  is  given  chronologically ;  first,  a  review  of 
the  general  events  of  interest  to  the  Association,  and  second,  a  brief 
statement  of  the  course  of  the  principal  markets  both  as  to  produce 
and  provisions.  As  far  as  possible  the  duplication  of  the  mass  of 
statistics  as  published  each  year  in  the  report  of  the  secretary  has 
been  avoided.  Volume  Three  is  devoted  to  personal  sketches  and 
portraits  of  a  large  number  of  the  leading  members  of  the  Board  of 
Trade,  which,  for  the  convenience  of  the  reader,  are  published  in 
alphabetical  order. 


'i 


History  of  the  Board  of  Trade  of 
the  City  of  Chicago 


CHAPTER    I 


A  Brief  History  of  the  Region  Now  Tributary  to  Chicago,  Also 
Showing  Why  This  City  Has  Become  the  Great  Food  Market 
of  the  Continent 

SPAIN  claimed  the  New  World  by  right  of  discovery;  and  her 
claim  was  confirmed  in  1493  by  the  famous  Bull  of  Pope  Alex- 
ander VI,  which  fixed  upon  a  meridian  one  hundred  leagues  west  of 
the  Azores  and  Cape  Verde  Islands  as  the  line  of  demarcation,  west- 
ward of  which  Spain  should  have  sole  right  of  conquest,  and  east- 
ward of  which  Portugal  should  have  the  same  right.  Although  by 
the  Convention  of  Tordesillas  between  Spain  and  Portugal,  in  the 
following  year,  the  former  consented  to  the  removal  of  the  line  of 
demarcation  to  a  meridian  370  leagues  west  of  the  Cape  Verde 
Islands,  she  thereby  relinquished  only  the  eastern  part  of  South 
America,  the  new  line  running  near  the  mouths  of  the  great  rivers 
Amazon  and  La  Plata,  and  leaving  her  the  sole  claimant  with 
Papal  sanction,  to  the  greater  part  of  South  America,  all  of  Cen- 
tral and  North  America,  and  the  islands  of  the  West  Indies. 

The  Spaniards  of  the  15th  and  16th  centuries  looked  upon  the 
heathen  aborigines  of  their  vast  domain  as  proper  objects  of  spolia- 
tion, and  it  is  not  strange  that  their  first  marauding  expeditions 
on  the  mainland  of  the  American  continent  should  have  been 
directed  against  Mexico,  Peru  and  Central  America.  They  were 
in  search  of  gold ;  and  the  milder  climate  of  these  regions,  the 
gentler  nature  of  the  inhabitants,  their  higher  civilization  and 
greater  wealth  tendered  the  unfortunate  natives  a  more  tempting 
object  of  plunder  than  the  fierce  warriors  who  roamed  the  vast 
wilderness  between  the  Gulf  of  Mexico  and  the  Great  Lakes. 

Spanish  colonists  followed  closely  the  conquistadors,  but  they, 
too,  were  possessed  by  the  lust  of  gold ;  and  the  immense  spoil  of 
Mexico  and  Peru  seemed  to  point  to  an  inexhaustible  supply  still 
to  be  had  in  those  countries.  Even  before  Cortez  conquered  Mexico 
in  1521,  Spanish  colonies  had  been  planted  on  the  principal  islands 

17 


18  HISTORY  OF  THE  BOARD  OF  TRADE 

of  the  Caribbean  Sea  and  on  the  Isthmus  of  Panama ;  some  of  them 
by  the  great  Discoverer  himself.  If  gold  was  not  found  every- 
where, Indians  at  least  were  numerous,  and  upon  one  pretext  or 
another  they  were  reduced  to  slavery  and  forced  to  toil  in  the 
cultivation  of  semi-tropical  products  which  were  easily  convertible 
into  the  precious  metal. 

For  nearly  a  century,  from  the  first  voyage  of  Columbus  in 
1492,  to  the  destruction  of  the  Great  Armada  in  1588,  Spain  had  no 
troublesome  rival  in  the  colonization  of  the  New  World.  France 
and  England,  the  only  maritime  nations  which  could  have  inter- 
fered with  her  projects,  refrained,  not  from  chivalrous  scruples 
about  her  rights,  nor  on  account  of  Pope  Alexander's  Bull ;  but 
because  pressing  domestic  affairs  absorbed  their  energies;  and  more 
than  all,  out  of  respect  for  Spanish  naval  power.  It  was  the  period 
of  the  Reformation ;  and  when  England  and  France  were  not  at 
war  with  each  other,  they  were  torn  with  dissension  between  the 
devotees  of  the  old  faith  and  those  who  upheld  the  new.  In  Eng- 
land it  was  the  time  of  Henry  the  Eighth,  of  the  separation  of  the 
English  Church  from  the  Church  of  Rome ;  the  time  of  Mary,  in 
whose  short  reign  the  persecution  of  protestants  won  for  her  the 
sobriquet  "Bloody  Mary" ;  the  time  of  "Good  Queen  Bess,"  of 
Spenser,  of  Shapespeare,  of  Ben  Johnson,  and  the  author  of  Utopia. 

Contemporary  France  was  at  war  most  of  the  time.  England, 
Austria,  Spain  and  Naples  were  among  her  foreign  antagonists; 
while  for  nearly  forty  years  in  the  last  half  of  the  Sixteenth  Century 
she  was  desolated  by  the  merciless  domestic  contests  of  Catholics 
and  Protestants,  of  which  the  Massacre  of  the  Huguenots  on  St. 
Bartholomew's  night,  1572,  was  one  of  the  incidents. 

The  wise  administration  of  Henry  of  Navarre,  who  ascended 
the  throne  of  France  in  1589,  healed  the  wounds  caused  by  the 
religious  wars ;  the  destruction  of  the  Invincible  Armada  and  the 
decadence  of  Spanish  naval  power  opened  the  seas  of  the  world 
and  the  Continent  of  America  to  the  adventurers  of  all  nations, 
and  soon  after  the  dawn  of  the  Seventeenth  Century,  both  France 
and  England  sent  out  colonies  to  occupy  and  possess  parts  of  the 
New  World,  of  whose  existence  the  English,  it  would  seem,  had 
little  knowledge  for  more  than  fifty  years  after  its  discovery  by 
Columbus. 

John  Fiske  says  that  "until  the  middle  of  the  Sixteenth  Cen- 
tury, no  English  chronicler  mentions  either  Columbus  or  the 
Cabots,  nor  is  there  anywhere  an  indication  that  the  significance 
of  the  discoveries  in  the  Western  ocean  was  at  all  understood." 
(The  Discovery  of  America,  Vol.  I.,  page  453.) 

French  and  English  Colonization 

At  the  beginning  of  the  Seventeenth  Century,  Spain,  after  a 
hundred  years  of  colonizing  effort,  was  firmly  seated  in  Mexico, 


OF  THE  CITY  OF  CHICAGO  19 

Central  America,  and  along  the  Spanish  Main  to  the  east  of  the 
Isthmus  of  Panama ;  and  her  possession  of  Cuba,  Porto  Rico,  Haiti 
and  Jamaica,  converted  the  Caribbean  Sea  and  the  Gulf  of  Mexico 
into  a  Spanish  lake.  But,  with  the  exception  of  a  fort  at  St.  Augus- 
tine, in  Florida,  and  a  few  settlers  around  it,  neither  Spain  nor  any 
other  European  nation  had  made  a  permanent  lodgment  upon  the 
North  American  Continent  north  of  the  Gulf  of  Mexico.  Ponce  de 
Leon  had  visited  Florida  in  1512  in  search  of  the  Fountain  of  Youth, 
and  in  the  distorted  maps  of  the  period  the  name  Florida  covers 
much  of  the  present  territory  of  the  United  States  east  of  the 
Mississippi  River,  sometimes  extending  west  of  that  stream; 
Jacques  Cartier  in  1535  had  ascended  the  St.  Lawrence  River  as  far 
as  Hochelaga,  an  Indian  village  where  Montreal  now  stands; 
Hernando  de  Soto  had  discovered  the  Mississippi  River  in  1541 ; 
Nunez,  between  1529  and  1538,  and  Coronado  in  1540,  had  led 
expeditions  among  the  Indians  of  the  southwest.  Attempts  had 
been  made,  both  by  France  and  Spain,  to  establish  colonies  in 
Florida ;  by  the  English  under  Sir  Walter  Raleigh  on  Roanoke 
Island,  as  well  as  by  the  French  under  Cartier  on  the  St.  Lawrence. 
All  these  attempts  at  colonization  had  failed  ;  and  even  the  fort  at 
St.  Augustine,  erected  by  the  Spaniards  in  1565,  had  been  captured 
by  Sir  Francis  Drake  in  1586,  and  the  town  plundered,  although 
not  permanently  held  by  the  English.  The  great  continent  to  the 
north  was  virgin  territory ;  and  before  the  first  decade  of  the  seven- 
teenth century  had  passed,  an  English  colony  was  planted  at 
Jamestown  in  Virginia,  in  1607,  and  a  French  colony  at  Quebec  in 
1608.  These  were  soon  followed  by  the  Dutch  settlement  on  Man- 
hattan Island,  in  1613-1614,  and  in  1620,  and  the  years  immediately 
thereafter  by  the  occupation  of  INIassachusetts  by  English  Puritans. 
At  first  glance  it  appears  remarkable  that  the  English  and 
Dutch  colonies  which  grew  much  more  rapidly  than  the  French 
settlements  on  the  St.  Lawrence,  should,  for  nearly  150  years,  have 
failed  to  occupy,  or  even  to  explore  the  hinterland  which  lay  in  the 
west,  while  the  comparatively  weak  French  colonies  early  recog- 
nized the  value  of  the  great  interior,  and  so  far  as  their  numbers 
would  permit,  occupied  its  strategic  points,  for  their  own  profit,  the 
glory  of  France,  and  the  extension  of  the  Catholic  faith.  Some  of 
the  reasons  for  this  neglect  of  opportunity  are  apparent.  It  must 
be  remembered  that  for  many  years  after  the  first  settlements  were 
made  on  the  Atlantic  Coast,  the  English  colonists,  who  had  less 
tact  in  dealing  with  the  natives  than  the  French  possessed,  found 
themselves  fully  occupied  in  maintaining  their  positions  against 
the  Indians,  who  soon  became  hostile,  and  opposed  quite  naturally, 
an  advance  into  their  hunting  grounds.  The  Allegheny  mountains, 
too,  were  a  formidable  barrier,  and  so  was  the  dense  forest  which 
covered  the  whole  of  New  York,  Pennsylvania,  Maryland  and  Vir- 
ginia, through  which  lay  the  only  route  to  the  west,  and  in  which 


20  HISTORY  OF  THE  BOARD  OF  TRADE 

there  was  neither  wagon  road  nor  navigable  stream.  Hemmed  in  by 
a  triple  wall  of  mountains,  impenetrable  forests,  and  hostile  Indians, 
the  colonists,  who  were  from  maritime  nations,  may  well  have  felt 
that  for  them  the  line  of  least  resistance  was  on  the  ocean  and  along 
its  coast  southward. 

On  the  other  hand,  the  French  colonists  on  the  St.  Lawrence 
were  admirably  situated  for  excursions  into  the  interior.  Already 
hundreds  of  miles  from  the  sea,  in  an  unproductive  agricultural 
region,  occupying  the  bank  of  the  greatest  waterway  system  on  the 
continent,  their  environment  urged  and  the  hope  of  controlling 
the  fur  trade  lured  them,  to  explore  the  unknown  region  in  the 
distant  west. 

And  so  it  came  about  that  in  1615,  five  years  before  the  May- 
flower sailed  for  Plymouth,  Champlain,  the  founder  of  Quebec,  and 
first  Governor  of  New  France,  explored  his  dominons  as  far  west  as 
Lake  Huron,  and  followed  Lake  Ontario  and  the  St.  Lawrence 
River  down  to  the  lake  which  bears  his  name.  Before  his  death  in 
1635,  and  about  the  time  the  first  English  settlers  went  into  Con- 
necticut, the  Canadian  Frenchmen  established  trading  posts  on 
the  Great  Lakes,  and  in  1634  Jean  Nicollet  visited  Lake  Michigan, 
followed  Green  Bay  to  its  head,  ascended  the  Fox  River,  crossed 
the  portage  to  the  Wisconsin,  and  achieved  immortal  fame  as  the 
first  white  man  whose  eyes  ever  rested  on  the  forests  and  streams 
and  plains  of  the  Great  Northwest,  and  after  Champlain,  the  first 
to  bring  to  the  French,  information  of  the  Indians  who  lived  in 
the  land  of  the  bufifalo. 

The  decisive  victories  of  the  Iroquois  Indians  over  the  Hurons 
and  other  Indian  allies  of  the  French  about  this  time,  obliged 
the  latter  to  close  their  trading  posts  on  the  Great  Lakes,  tempo- 
rarily, and  to  cease  their  activity  as  explorers  in  the  West.  It  was 
not  until  1673  that  we  have  a  record  of  the  first  visit  of  civilized 
men  to  the  Chicago  Portage,  although  it  is  by  no  means  improbable 
that  some  wandering  coureurs  de  bois  may  have  been  upon  the 
spot  before  this  date.  It  is  claimed  by  some  that  La  Salle  used  the 
Chicago  Portage  in  1671,  and  Andreas,  Vol.  I,  p.  61,  quotes  Margry 
as  authority  for  this  view. 

The  Chicago  Watershed 

Chicago  is  the  only  city  in  the  world,  of  metropolitan  rank, 
which  stands  upon  a  continental  watershed.  While  there  never 
was  anything  in  the  topography  of  this  region  to  indicate  to  an 
observer  that  he  was  standing  at  the  parting  of  the  continental 
waters,  it  is  true,  nevertheless,  that  when  the  first  civilized  man 
visited  the  spot  where  Chicago  now  stands,  a  very  slight  elevation 
between  the  headwaters  of  the  South  Branch  of  the  Chicago 
River,  and  the  Des  Plaines  River,  constituted  a  watershed  from 
which,  after  heavy  rains,  and  during  the  usual  spring  freshets  the 


OF  THE  CITY  OF  CHICAGO  21 

flood  waters  of  Mud  Lake  and  the  surrounding  country  were 
discharged  in  part  through  the  Chicago  River,  the  Great  Lakes, 
and  the  St.  Lawrence  River  into  the  Atlantic  Ocean,  and  in  part 
through  the  Des  Plaines,  the  Illinois  and  Mississippi  Rivers  into 
the  Gulf  of  Mexico.  Changed  conditions  were  created  when  the 
Chicago  Drainage  Channel  was  opened  in  January,  1900.  This 
great  canal,  cutting  through  the  few  feet  of  earth  which  formed  the 
actual  divide,  not  only  reverses  the  current  in  the  South  Branch 
of  the  Chicago  River,  and  discharges  its  waters  into  the  Des  Plaines 
River  at  Lockport,  but  supplements  this  natural  flow  by  some  400,- 
000  cubic  feet  per  minute,  which  the  removal  of  the  obstruction 
causes  Lake  Michigan  to  pour  into  the  mouth  of  the  main  stream 
of  the  Chicago  River,  on  its  way  to  the  Gulf  of  Mexico.  The 
Northern,  Western  and  Central  portions  of  the  City  of  Chicago 
which,  prior  to  the  opening  of  the  Drainage  Channel,  had  been  at 
the  head  of  the  Great  Lakes — St.  Lawrence  waterway  system  were, 
by  this  event,  transferred  to  the  Mississippi  River  system.  On  the 
other  hand,  the  extreme  southern  portion  of  the  city  remains  in 
the  system  first  named ;  because  the  Calumet  River,  to  which  it  is 
tributary,  discharges  its  waters  into  Lake  Michigan  at  South  Chi- 
cago, twelve  miles  from  the  mouth  of  the  stream  which  for  many 
years  bore  all  the  commerce  of  the  city.  But,  when  the  Sag  Canal, 
begun  in  1911,  shall  have  been  completed,  and  the  flow  of  the  Calu- 
met reversed,  as  the  flow  of  the  Chicago  River  has  been,  Chicago 
will  lose  the  unique  distinction  just  claimed  for  it.  Lake  Michigan 
itself  will  become  the  continental  watershed,  and  the  City  of 
Chicago  thenceforth  will  have  a  permanent  place  at  the  head  of 
the  principal  Mississippi  River  waterway  system.  Thus,  by  man's 
agency,  conditions  will  be  re-established  which  geologists  tell  us 
prevailed  in  post-glacial  times,  when  the  level  of  Lake  Michigan 
was  considerbaly  higher  than  it  is  now,  and  its  waters  were  dis- 
charged through  the  Des  Plaines,  the  Illinois  and  the  Mississippi 
into  the  Gulf  of  Mexico. 

The  Chicago  Divide  does  not  appeal  to  the  imagination  like 
those  spots  in  the  Rocky  Mountains  from  which  the  parting  waters 
flow  on  the  one  side  to  the  Pacific,  and  on  the  other  to  the  Gulf  of 
Mexico;  but  from  a  commercial  standpoint  it  is  by  far  the  most 
important  watershed  on  the  American  Continent. 

The  Portage 

Nature  certainly  intended  that  near  the  head  of  Lake  Michigan 
there  should  be  a  meeting  place  for  the  people  east,  west  and  north 
of  this  spot;  but  it  was  the  short  and  easy  carry  around  the  Divide 
during  a  favorable  stage  of  water,  which  made  the  Chicago  portage 
attractive  to  the  first  civilized  explorers,  as  probably  it  had  been 
to  many  generations  of  savages  before  the  advent  of  the  white  man. 
Indeed,  at  times,  it  was  possible  for  a  small  boat  under  sail  to  cross 


22  HISTORY  OF  THE  BOARD  OF  TRADE 

the  Divide,  which  was  covered  in  the  extreme  flood  seasons  by 
about  two  feet  of  water.  In  1821,  Colonel  Ebenezer  Childs  was 
returning  to  Wisconsin  from  a  visit  to  St.  Louis  via  the  Illinois 
and  Des  Plaines  rivers,  in  a  canoe.  He  says :  "I  saw  but  one  house 
from  the  mouth  of  the  Illinois  to  Fort  Clark,  where  Peoria  now  is, 
at  which  latter  place  one  French  trader  resided.  *  *  *  We 
continued  up  the  Illinois  to  the  junction  of  the  Kankakee  and  Eau 
Plaine,  and  thence  up  the  Eau  Plaine  to  where  I  supposed  we  had 
to  make  a  portage  to  Chicago  River ;  but  I  could  not  see  any  signs 
of  the  portage.  There  had  been  heavy  rains  for  several  days,  which 
had  so  raised  the  streams  that  they  overflowed  their  banks.  I  con- 
cluded that  I  had  gone  far  enough  for  the  portage,  so  I  left  the  Eau 
Plaine  and  took  a  northeast  direction.  After  traveling  a  few  miles 
I  found  the  current  of  the  Chicago  River.  The  whole  country  was 
inundated ;  I  found  not  less  than  two  feet  of  water  all  the  way 
across  the  portage."  '■ 

Two  years  later  Keating,  the  historian  of  Major  Long's  expedi- 
tion to  the  source  of  the  St.  Peter's  River,  which  passed  through 
Chicago  in  early  June,  1823,  was  informed  by  Lieutenant  Hopson, 
an  officer  at  Fort  Dearborn,  that  he  had  crossed  the  portage  with 
ease  in  a  boat  loaded  with  lead  and  flour.  Of  similar  purport  is 
the  account  given  by  Gurdon  S.  Hubbard  of  his  first  ascent  of  the 
Des  Plaines  with  the  Illinois  "brigade"  of  the  American  Fur  Com- 
pany in  the  spring  of  1819.  The  passage  from  Starved  Rock  to 
Cache  Island  against  the  heavy  current  was  difficult  and  exhausting. 
From  this  point  with  a  strong  wind  blowing  from  the  southwest, 
sails  were  hoisted  and  the  loaded  boats  "rapidly  passed  up  the  Des 
Plaines  River,  through  Mud  Lake,  to  South  Branch,  regardless 
of  the  course  of  the  channel,  and  soon  reached  Chicago." 

To  the  birch  bark  canoe  of  the  Indian  and  the  Canadian  voy- 
ageur,  the  Chicago  River — Des  Plaines  route  from  Lake  Michigan 
to  the  Mississippi  Valley  was  an  ideal  one  during  seasons  of  high 
water,  when  the  "Portage"  itself  was  submerged ;  but  as  the  flood 
waters  subsided,  and  it  became  necessary  to  carry  the  boats  and 
their  contents  across  the  Divide,  the  Chicago  Portage  lost  its  pre- 
eminence, and  in  times  of  very  low  water  in  the  Des  Plaines  River, 
when  the  channel  of  that  stream  was  a  succession  of  pools  with  very 
little  water  seeping  between  them,  portage  was  necessary  from  the 
South  Branch  of  the  Chicago  to  the  Illinois  River  at  the  mouth  of 
the  Vermillion,  a  distance  of  about  one  hundred  miles.  Between 
these  extremes  of  high  water  giving  perfect  passage  for  small  boats 
over  the  divide,  and  low  water  when  the  long  portage  made  the 
transit  difficult  and  laborious,  there  must  have  been  a  considerable 
portion  of  the  year  when  there  was  sufficient  water  in  the  Des 
Plaines  to  float  a  loaded  canoe,  and  when  a  portage  from  the  South 
Branch  of  the  Chicago  River  near  Robey  Street  to  the  Des  Plaines 

1  Reports  of  the  State  Historical  Society  of  Wisconsin,  Vol  4,  p.  163. 


OF  THE  CITY  OF  CHICAGO  23 

River,  at  the  outlet  of  Mud  Lake,  a  distance  of  nine  or  ten  miles, 
offered  fairly  favorable  conditions  for  such  traffic  as  the  times 
demanded. 

Whether  or  not  La  Salle  was  the  first  white  man  who  visited 
the  site  of  the  future  metropolis,  he  certainly  left  the  earliest  descrip- 
tion of  the  Chicago  Portage  of  which  there  is  any  record.  He  says, 
"There  is  a  neck  of  land  to  the'  West  of  the  lake  of  the  Illinois,  in 
latitude  41°  5',  reached  by  a  channel  formed  by  the  junction  of 
many  small  streams  or  prairie  gullies.  This  channel  is  navigable 
about  two  leagues  to  the  edge  of  the  prairie.  About  a  quarter  of  a 
league  farther  west,  there  is  a  little  lake  a  league  and  a  half  long, 
divided  in  two  by  a  beaver  dam.  From  this  lake  a  small  stream 
issues,  which,  after  winding  among  the  rushes  for  about  half  a 
league,  falls  into  the  Chicago  River,  which  falls  into  the  Illinois. 
This  lake,  when  filled  by  heavy  rains,  or  by  the  spring  freshets, 
also  empties  into  the  channel  leading  to  the  Illinois  Lake  (now 
Lake  Michigan),  the  surface  of  which  is  7  feet  lower  than  the  prairie 
in  which  this  little  lake  is  situated.  (Margry,  Vol.  2,  p.  166.)  It  is 
apparent  that  the  "Chicago  River,"  of  which  he  speaks,  is  the  Des 
Plaines,  and  the  "channel"  is  the  main  Chicago  River  as  we  know 
it  and  the  South  Branch  thereof. 

The  Earliest  Records 

Unless,  as  seems  possible,  but  not  susceptible  of  absolute  proof, 
La  Salle  visited  the  present  site  of  Chicago  in  1671,  Louis  Joliet 
and  Father  Jacques  Marquette,  who  came  here  in  1673,  were  the 
first  white  men  to  reach  this  spot,  of  whom  any  record  has  been 
preserved.  The  large  collection  of  original  records  of  these  earliest 
explorations  is  preserved  in  the  archives  of  St.  Mary's  College, 
Montreal,  and  is  known  as  the  "Jesuit  Historical  Collections."  A 
selection  from  these  records,  including  the  original  journal  and 
map  of  Rev.  Father  Jacques  Marquette,  S.  J.  (1673-1674),  was 
exhibited  at  the  Louisiana  Purchase  Exhibition  at  St.  Louis,  Mis- 
souri, in  1904.  Joliet  was  a  young  Canadian  of  French  descent, 
who  had  acquired  some  reputation  as  an  explorer,  and  who  was 
directed  by  Frontenac,  Governor,  and  Talon,  Intendant  of  New 
France,  to  explore  the  "gerat  river"  which,  according  to  Indian 
report,  flowed  "westward  to  the  Vermillion  Sea"  as  the  Gulf  of 
California  was  then  known.  The  Gulf  of  California  was  explored 
in  1539,  by  the  Spaniards,  under  Cortez,  but  "the  name  which  his 
captains  gave  to  the  Gulf,  the  Sea  of  Cortez,  failed  to  abide.  It 
grew  to  be  generally  called  the  Red  Sea,  out  of  some  fancied  resem- 
blance, as  Wytfliet  says,  to  the  Red  Sea  of  the  Old  World."  (Win- 
sor.  Vol.  II,  p.  443.) 

Father  Dablon's  report,  which  was  based  upon  conversations 
with  Joliet  himself,  continues,  "The  third  remark  is  that,  as  it 
would  have  been  highly  desirable  that  the  terminus  of  that  dis- 


24         HISTORY  OF  THE  BOARD  OF  TRADE 

covery  should  prove  to  be  the  Vermillion  Sea,  which  would  have 
given  at  the  same  time  access  to  the  Sea  of  Japan  and  of  China — so, 
also,  we  must  not  despair  of  succeeding  in  that  other  discovery  of 
the  Western  Sea  by  means  of  the  Mississippi.  For  ascending  ot 
the  Northwest  by  the  river  which  empties  into  it  at  the  38th  degree, 
as  we  have  said,  perhaps  one  would  reach  some  lake,  which  will 
discharge  its  waters  toward  the  west." 

Marquette  was  a  French  Jesuit,  who  had  established  a  mission 
at  St.  Ignace  on  the  Straits  of  Mackinac,  and  v>'ho  had  been  chosen 
to  accompany  Joliet.  Michillimackinac  was  the  name  given  by  the 
Indians  (as  rendered  by  the  French)  to  the  island  now  known  as 
Mackinac.  This  name,  under  the  French  regime,  was  applied  to 
the  mainland  in  the  vicinity,  and  very  early  (perhaps  in  1668),  to 
one  of  the  Provinces  into  which  New  France  was  divided.  This 
Province  of  Michillimackinac  included  the  country  west  of  Quebec 
Province,  with  indefinite  boundaries,  but  certainly  embracing  the 
present  State  of  Michigan,  and  portions  of  Wisconsin  and  Minne- 
sota. The  first  Fort  Michillimackinac  was  built  by  the  French  in 
1673,  on  Point  St.  Ignace,  opposite  the  island  of  Michillimackinac, 
on  the  north  shore  of  the  strait,  a  mission  church  having  been  built 
there  two  years  before  by  Father  Dablon,  S.  J.,  and  Father  Mar- 
quette, S.  J.  In  1688  this  was  the  commercial  and  military  center  of 
the  Northwest.  (Bailey,  p.  70.)  There  were  two  other  forts  in  the 
northern  region,  one  on  Green  Bay,  and  another  at  Sault  Ste.  Marie, 
both  of  which  were  founded  at  an  early  period ;  but  Fort  Michilli- 
mackinac was  much  the  largest,  containing  thirty  families  inside 
the  palisades,  and  about  as  many  more  without. 

In  1705  the  Jesuits  abandoned  their  mission  at  Michillimackinac 
(St.  Ignace),  burned  the  church  to  prevent  its  desecration,  and 
returned  to  Quebec,  and  the  garrison  was  withdrawn.  In  1714  this 
fort  was  again  occupied  by  a  French  garrison ;  but  it  had  lost  some 
of  its  importance,  owing  to  the  establishment,  in  1701,  of  a  fort  at 
Detroit. 

Finally  (perhaps  in  1728)  the  post  at  St.  Ignace  was  abandoned 
and  a  new  post  of  Michillimackinac  built  on  the  south  shore  of  the 
straits,  at  what  is  known  as  "old"  Mackinaw  City,  eight  or  ten 
miles  south  from  St.  Ignace,  on  the  northern  point  of  the  Southern 
Peninsula  of  Michigan.  This  was  held  by  the  French,  until  1761, 
when  it  was  taken  over  by  the  English.  In  1763  it  was  captured  by 
the  Indians  at  the  time  of  Pontiac's  conspiracy,  and  the  garrison 
massacred,  or  made  prisoners ;  but  after  the  treaty  of  peace  with 
the  Indians,  made  in  Detroit,  in  1764,  by  General  Bradstreet,  it  was 
again  occupied  by  the  British  until  1780,  when  they  built  a  new  fort 
on  the  island  of  Michillimackinac,  which,  since  then,  has  been  the 
only  Fort  Mackinac  in  existence. 

Meeting  at  Michillimackinac,  Joliet  and  Marquette,  with  five 
companions,  in  two  canoes,  skirted  the  northern  portion  of  Lake 


OF  THE  CITY  OF  CHICAGO  25 

Michigan,  followed  the  shore  of  Green  Bay  southward  to  the  mouth 
of  the  Fox  River  of  Wisconsin,  which  they  ascended,  crossed  the 
portage  to  the  Wisconsin  River,  and  reached  the  Mississippi  in 
June,  1673.  Passing  the  mouth  of  the  Missouri  and  the  Ohio  they 
descended  the  Great  River  to  the  mouth  of  the  Arkansas,  when 
having  become  satisfied  that  it  emptied  into  the  Gulf  of  Mexico, 
and  hearing  from  the  Indians  fearsome  tales  of  the  sanguinary 
character  of  the  natives  farther  down  the  river,  they  returned  to  the 
mouth  of  the  Illinois.  Here  they  were  persuaded  by  the  friendly 
Indians  to  adopt  the  Illinois  River  route  on  their  return  to  Mackinac, 
and  although  the  Chicago  Portage  was  not  at  its  best  at  that  season 
of  the  year,  unless  there  had  been  heavy  rains,  it  is  generally 
accepted  as  a  fact  that  they  used  it  on  their  way  to  Green  Bay, 
where  they  arrived  late  in  September,  1673.  Even  if,  as  has  been 
claimed,  without  sufficient  reason,  they  used  the  Calumet  Portage, 
still  they  must  have  reached  Lake  Michigan  within  the  present 
limits  of  the  City  of  Chicago. 

Joliet  spent  the  winter  at  Green  Bay,  and  the  next  year  went  to 
Quebec,  where  he  reported  to  Count  Frontenac,  the  Governor. 
Unfortunately,  his  canoe  upset  in  the  Sault  Ste.  Louis,  near  Mon- 
treal, after  safely  passing  more  than  40  rapids  of  the  St.  Lawrence 
River.  He  barely  escaped  with  his  life  after  struggling  four  hours 
in  the  water,  and  his  journals  and  charts  were  lost.  Father  Dablon 
gives  the  following  upon  Joliet's  authority :  "We  could  go  with 
facility  to  Florida  in  a  bark  and  by  very  easy  navigation.  It  would 
only  be  necessary  to  make  a  canal  by  cutting  through  but  half  a 
league  of  prairie  to  pass  from  the  foot  of  the  lake  of  the  Illinois  to 
the  River  St.  Louis.  More  than  two  centuries  were  to  pass  before 
the  Chicago  Drainage  Canal  was  commenced,  the  beginning  of  the 
Great-Lakes-to-the-Gulf  waterway,  which  Joliet  was  the  first  to 
suggest.  Marquette  also  passed  the  winter  at  Green  Bay,  and  in 
October  of  the  following  year,  with  two  Canadian  voyageurs,  he 
started  for  the  Illinois  country  to  fulfill  a  promise  made  to  the 
Illinois  Indians  at  old  Kaskaskia,  then  near  Starved  Rock  on  the 
Illinois  River,  between  Ottawa  and  Utica,  that  he  would  return 
and  establish  a  mission  among  them.  The  little  party  was  joined 
by  a  number  of  Indians,  and  proceeded  by  the  way  of  Green  Bay 
and  the  western  shore  of  Lake  Michigan  to  the  "river  of  the  por- 
tage." It  was  a  stormy  season  and  they  did  not  reach  Chicago 
River  until  late  in  November,  when  they  found  it  covered  with  six 
inches  of  ice.  They  spent  ten  days  in  camp  at  the  mouth  of  the 
river,  and  then  decided  to  pass  the  winter  "about  two  leagues 
up"  the  South  Branch,  near  the  beginning  of  the  portage,  where, 
in  a  rude  cabin,  probably  resembling  an  Indian  wig"wam,  they 
"began,  in  December,  1674,  the  first  extended  sojourn,  so  far  as 
we  have  record,  of  white  men  on  the  site  of  the  future  Chicago." 
(Quaife,   p  24.)     This   was   eight   years   before    Philadelphia   was 


26         HISTORY  OF  THE  BOARD  OF  TRADE 

laid  out,  and  six  years   before   Ciiarleston,   South   Carolina,   was 
settled. 

Marquette  was  ill ;  but  the  voyageurs  were  loyal  to  him,  the 
Illinois  Indians  sent  supplies  of  food,  and  two  Frenchmen,  who  had 
established  a  trading  post  18  leagues  from  Chicago,  where  the  hunt- 
ing was  good,  were  exceedingly  attentive  to  his  wants.  One  of 
them,  to  whom  Marquette  refers  in  his  journal  as  "the  surgeon," 
came  fifty  miles  in  the  depth  of  winter  to  attend  him.  The  other 
was  Pierre  Moreau,  a  noted  trader,  who  was  known  as  La  Taupine. 
He  and  "the  surgeon"  were  the  first  white  men  who  conducted 
business  operations  in  Northern  Illinois.  Notwithstanding  the 
feeble  condition  of  Marquette's  health,  and  his  primitive  surround- 
ings, he  and  his  companions  appear  to  have  passed  the  winter  in 
comparative  comfort ;  and  when  the  ice  melted  in  the  latter  part  of 
March,  1675,  they  resumed  their  journey  to  the  Illinois  Indians ; 
but  not  until  they  had  nearly  lost  their  belongings  through  a  sudden 
ice  gorge  which  backed  up  the  water  of  the  South  Branch  and 
flooded  their  camp. 

Marquette's  stay  with  the  Kaskaskia  Indians  was  short.  He 
established  his  mission  as  promised,  but  knowing  that  his  end  was 
near,  he  soon  began  his  return  journey  to  St.  Ignace.  A  great  num- 
ber of  the  Indians  accompanied  him  as  far,  probably,  as  the  Chi- 
cago Portage.  Going  from  Chicago  around  the  southern  end  of 
the  lake,  he  traveled  northward  until,  on  the  19th  of  May,  1675, 
on  the  eastern  shore  of  Lake  Michigan,  where  the  City  of  Luding- 
ton  now  stands,  at  the  mouth  of  a  small  stream  which  bears  his 
name,  the  gentle  Marquette  passed  to  his  reward.  The  State  of 
Wisconsin  has  honored  herself  by  placing  his  statue  in  Statuary 
Hall  in  the  Capitol  at  Washington. 

Father  Claude  Allouez,  another  French  Jesuit,  who  had  been 
stationed  at  the  mission  on  Green  Bay,  reached  the  Chicago  Por- 
tage with  two  companions,  probably  in  April,  1677,  on  his  way  to 
the  mission  which  Marquette  had  established  at  the  Indian  Village, 
near  Starved  Rock.  At  the  western  end  of  the  Portage  he  was  met 
by  a  band  of  eighty  Indians,  who  had  come  to  welcome  him  and 
escort  him  to  his  new  post.  His  stay  among  these  Indians  was 
brief,  but  he  returned  to  them  in  the  following  year,  probably  again 
crossing  the  Chicago-Divide,  but  leaving  no  record  of  this  visit. 

Possibly  La  Salle  himself  who  with  fourteen  companions  made 
his  way  down  the  western  shore  of  Lake  Michigan  from  Green  Bay 
to  the  mouth  of  the  St.  Joseph  River  in  Michigan,  stopped  at  the 
Chicago  River,  in  1679;  but  this  cannot  be  proved. 

Probably  Henry  de  Tonti,  an  Italian,  La  Salle's  able  and  faith- 
ful lieutenant,  passed  through  the  Chicago  River  with  a  few  fol- 
lowers, after  the  destruction  of  the  Illinois  Indians  by  the  Iroquois, 
and  the  mutiny  of  the  garrison  La  Salle  had  left  at  Crevecoeur,  a 
fort  which  he  built  in  the  early  part  of  1680,  near  the  present  site 


OF  THE  CITY  OF  CHICAGO  27 

of  the  City  of  Peoria,  and  which  was  called  by  the  Indians,  Che- 
cagou ;  but  absolute  proof  of  this  is  lacking. 

However,  it  is  certain  that  in  January,  1682,  La  Salle,  and 
Tonti,  who  had  arrived  in  the  preceding  month,  set  out  from  Chi- 
cago with  a  considerable  number  of  followers  upon  their  great 
expedition  to  the  mouth  of  the  Mississippi  River.  Dragging  their 
sledges  over  the  ice  of  the  Des  Plaines  and  Illinois  Rivers,  they 
reached  open  water  below  Lake  Peoria.  Floating  down  the  Illinois 
and  Mississippi  rivers  they  arrived  at  the  mouth  of  the  latter,  April 
9,  1682,  and  La  Salle  took  formal  possession  for  his  sovereign 
King  Louis  XIV,  of  France,  of  all  the  country  drained  by  the  Great 
River,  and  its  tributaries,  under  the  name  of  Louisiana. 

Lack  of  space  forbids  the  mention  of  several  travelers  who 
crossed  the  Chicago  Divide  during  the  last  fifteen  years  of  the 
seventeenth  century,  and  who  left  records  of  their  experiences. 
Among  these  accounts  is  the  journal  of  Joutel  who,  with  four  other 
survivors  of  La  Salle's  Texas  expedition,  reached  Chicago,  Sep- 
tember 25,  1687,  and  after  a  futile  attempt  to  proceed  farther, 
returned  to  Fort  St.  Louis  on  Starved  Rock,  where  they  spent  the 
winter.  Again,  on  the  29th  of  March,  1688,  they  reached  Chicago 
on  their  way  to  Canada.  Joutel  says  they  were  informed  that 
Chicago  takes  its  name  from  the  profusion  of  garlic  in  the  surround- 
ing woods.     (Quaife,  p.  38.) 

La  Salle,  writing  in  1683,  said  in  reference  to  the  portage 
Chicagou,  "the  land  there  produces  naturally  a  quantity  of  roots 
good  to  eat,  as  wild  onions."  "Cadillac,  the  commandant  at  Mack- 
inac, 1695,  in  making  a  report  to  the  governor  of  Canada  on  the 
territory  under  his  control,  refers  to  Chicago,  which  signifies,  he 
says,  river  of  the  onion."  (Currey,  Vol.  I,  p.  33.)  Testimony  is 
abundant  that  a  name  resembling  Chicago  was  applied  by  the 
natives  to  numerous  streams,  including  the  Mississippi,  Illinois 
and  Des  Plaines  rivers,  as  well  as  to  the  Chicago  River;  and  An- 
dreas (Vol.  I,  p.  37)  says  that  the  Des  Plaines  River  went  by  the 
name  of  Chicago  River  until  1812.  In  this  connection,  the  same 
author  quotes  Dr.  William  Barry,  first  secretary  of  the  Chicago 
Historical  Society,  as  saying,  "Whatever  may  have  been  the 
etymological  meaning  of  the  word  Chicago,  in  its  practical  use  it 
probably  denotes  strong  or  great.  The  Indians  applied  this  term 
to  the  Mississippi  River,  to  thunder,  or  to  the  voice  of  the  Great 
Manitou." 

There  was  a  chief  of  one  of  the  Illinois  tribes  named  Chicagou, 
who  was  in  Paris,  in  1725. 

Some  of  the  variations  of  the  name,  given  by  Kirkland  in  "The 
Story  of  Chicago,"  are,  "Che-cau-gou,"  "Chicagua,"  "Chikagu," 
"Chickagou,"  "Chicahu,"  "Shecaugo,"  meaning  playful  waters,  and 
"Chac-ca-go,"  meaning  destitute  (Pottawatomie?);  "Chicka-hou," 
"Shegahg,"    meaning    skunk ;    or    "She-gau-ga-winzhe,"    meaning 


28  HISTORY  OF  THE  BOARD  OF  TRADE 

skunk-weed  or  wild  onion  (Chippewa  dialect  of  the  Algonquins)  ; 
"Eschikagou,"  "Chicagou,  or  Garlick  Creek,"  "Gitchikag,"  mean- 
ing a  thing   great  or  strong   (dialect  of  the   Illinois   tribes). 

Dr.  Barry  seems  to  have  caught  the  Indian  meaning  of  the 
word.  If  it  could  be  applied  to  such  diverse  things  as  a  great  river, 
an  onion,  the  thunder,  an  Indian  chief,  and  the  voice  of  the  Great 
Spirit,  the  idea  in  the  mind  of  the  savage  must  have  been  a  thought 
of  power  in  some  form. 

In  the  latter  part  of  October,  1698,  Saint  Cosme  and  his  party 
visited  "Chikagwa"  on  their  way  from  Mackinac  to  the  Mississippi 
River,  and  spent  several  days  with  Father  Pierre  Pinet,  who,  in 
1696,  established  the  mission  of  the  Guardian  Angel  at  Chikagwa. 
There  is  wide  dilTerence  of  opinion  among  historians  as  to  the  loca- 
tion of  Father  Pinet's  mission.  Andreas  assumes  that  it  was  at 
Mud  Lake ;  Quaife  locates  it  on  the  Chicago  River,  between  the 
mouth  and  the  Forks;  while  Grover  claims  that  it  was  west  of  the 
present  village  of  Kenilworth,  and  "within  two  miles  of  the  city 
limits  of  Evanston,  and  about  five  miles  from  the  present  limits  of 
the  City  of  Chicago. 

Both  Andreas  and  Grover  appear  to  have  been  misled  by 
Shea's  mistranslation  of  St.  Cosme's  letter.  Quaife  makes  a  plausi- 
ble argument  in  favor  of  the  main  Chicago  River;  but  as  it  is  dis- 
tinctly stated  that  the  mission  was  located  at  an  Indian  Village 
of  more  than  150  cabins,  the  great  Indian  settlement  at  Bowman- 
ville  on  the  North  Branch  of  the  Chicago  River,  just  west  of  Rose- 
hill  Cemetery,  appears  to  the  writer  more  likely  to  have  been  the 
site  of  Father  Pinet's  Mission  than  any  other  place  as  yet  sug- 
gested. 

As  the  honor  of  being  the  first  white  man  to  visit  the  site  of 
the  present  City  of  Chicago  lies  between  Robert  Cavalier  Sieur  de 
la  Salle,  who  came  perhaps  in  1671,  and  Marquette  and  Joliet,  who 
passed  this  way  in  returning  to  Green  Bay  from  their  voyage  of 
discovery  on  the  lower  Mississippi  in  1673,  and  as  the  honor  of  being 
the  first  temporary  resident  belongs  to  Marquette  who  spent  the 
winter  of  1674-1675  in  his  cabin  on  the  South  Branch  of  the  Chicago 
River  at  the  present  intersection  of  Robey  Street,  so,  the  honor 
of  first  permanent  residence  belongs  to  Father  Pinet,  whose  mission 
was  not  finally  abandoned  until  the  year  1700.  At  one  time  the 
enmity  of  Count  Frontenac,  Governor  of  New  France,  compelled 
Pinet  to  close  the  mission,  but  Bishop  Laval's  influence  caused  it 
to  be  reopened  in  1698,  and  to  remain  open  for  about  two  years,  as 
above  stated. 

With  the  closing  of  the  Guardian  Angel  Mission,  and  Father 
Pinet's  departure  for  Cahokia,  where  he  died,  the  early  history 
of  Chicago  and  its  vicinity  comes  to  an  end;  and  for  more  than 
half  a  century  no  civilized  man  lived  there,  so  far  as  the  records 
show. 


OF  THE  CITY  OF  CHICAGO  29 

The  Eighteenth  Century 

In  the  autumn  of  1700  the  remnant  of  the  Kaskaskia  Indians 
abandoned  the  original  village  of  that  name,  which  was  in  the 
meadow  south  of  the  town  of  Utica,  and  nearly  "opposite  Fort 
St.  Louis"  (known  later  as  Starved  Rock),  and  settled  on  the 
Mississippi  River  near  the  mouth  of  the  Kaskaskia,  or  Okaw, 
River,  about  seventy  miles  below  St.  Louis,  Missouri,  bringing 
with  them  the  name  of  their  old  home,  Kaskaskia.  This  place 
assumed  great  importance  as  the  western  provincial  capital  under 
King  Louis  XIV  and  King  Louis  XV  of  France,  and  King  George 
III  of  Great  Britain,  and  later  as  the  capital  of  the  Territory  and 
State  of  lUinois.  It  had  at  its  best  a  population  of  several  thousand 
persons.  Fort  Gage,  built  by  the  British  in  1772  (Winsor,  p.  26), 
after  the  Mississippi  River  had  rendered  Fort  Chartres  untenable, 
was  their  military  headquarters  until  its  capture  by  Col.  George 
Rogers  Clark  in  1778.  From  this  place  the  Mississippi  River,  open 
at  all  seasons,  furnished  a  far  easier  and  more  speedy  means  of 
communication  with  the  sea  than  the  old  route  across  the  Chicago 
Portage.  The  trade  of  the  Illinois  country  followed  the  line  of 
least  resistance  and,  as  Northern  Illinois  was  almost  depopulated 
and  all  the  country  then  tributary  to  Chicago  greatly  disturbed 
by  the  Indian  wars,  and  the  fur  trade  nearly  destroyed,  there 
was  nothing  to  encourage  white  men  to  remain  in  or  near  the 
Chicago  River. 

At  the  beginning  of  the  eighteenth  century  the  English  col- 
onists were  still  confined  to  a  narrow  fringe  along  the  Atlantic 
Coast,  except  where  navigable  water  afforded  them  an  opportunity 
to  erect  and  maintain  some  defence  against  their  savage  neighbors. 
Haverhill,  about  thirty-two  miles  from  Boston,  was  attacked  by 
the  French  and  Indians  as  late  as  1708  and  its  inhabitants  mas- 
sacred, and  although  settlements  had  been  made  on  the  Connecticut 
River  many  years  before,  they  were  held  by  a  precarious  tenure. 
In  the  colony  of  New  York,  Schenectady  was  the  western  outpost, 
and  it  was  burned  by  the  Indians  and  French  in  1690,  and  most 
of  its  inhabitants  killed  or  captured.  Philadelphia  had  been  settled 
only  eighteen  years.  In  Virginia,  a  mill  and  warehouse  were  built 
at' Richmond  by  William  Byrd  in  1679,  but  the  town  was  not 
incorporated  until  1742.  In  North  Carolina  the  settlements  were 
confined  to  the  Cape  Fear  River,  and  in  South  Carolina  to  the 
vicinity  of  Charleston,  which  was  twenty  years  old.  Georgia  was 
not   settled  until   1733. 

The  French  held  the  St.  Lawrence  River,  the  region  of  the 
Great  Lakes  and  the  Illinois  country ;  and  the  settlement  which 
Iberville  made  near  the  mouth  of  the  Mississippi  River  in  1700 
added  the  sanction  of  visible  occupation  of  the  valley  of  that  river 
and   its  tributaries   to    La   Salle's   claim   of  discovery   and   formal 


30  HISTORY  OF  THE  BOARD  OF  TRADE 

possession  made  eighteen  years  earlier.  Protecting  these  numerous 
trading  posts  were  the  fort  at  Frontenac,  Fort  Conti  at  Niagara, 
Fort  Miami  at  the  mouth  of  the  St.  Joseph  River  in  Michigan; 
Fort  Vincennes,  Fort  St.  Louis,  on  the  Illinois  River,  and  Fort 
Massac  (Fort  Assumption),  on  the  Ohio  River  one  mile  east  of 
the  present  city  of  Metropolis,  Illinois.  The  country  between  the 
Great  Lakes  and  the  Ohio  River  was  sparsely  peopled  by  several 
tribes  of  Indians,  all  of  whom  lived  in  terror  of  the  Iroquois,  who 
had  desolated  this  region  half  a  century  before. 

In  La  Salle's  great  plan  for  the  development  of  New  France, 
Chicago  and  Illinois  occupied  the  position  of  honor.  The  Missis- 
sippi Valley  was  the  home  of  countless  herds  of  buffalo,  deer, 
antelope  and  elk,  as  well  as  vast  numbers  of  smaller  game,  turkeys, 
geese,  ducks  and  pigeons.  The  profitable  trade  in  furs  was  the 
prize  for  which  English  and  French  alike  fought  and  died ;  and 
nowhere,  probably,  was  large  game  so  plentiful  as  on  the  prairies 
of  Illinois.  La  Salle  had  planned  to  make  his  Illinois  colony  the 
mainstay  of  New  France.  Around  the  impregnable  Fort  St.  Louis, 
held  by  a  French  garrison,  he  aimed  to  rally  the  Illinois  Indians, 
making  of  them  an  efficient  fighting  force  which,  under  French 
leadership,  should  be  able  to  check  the  incursions  of  the  dreaded 
Iroquois.  Across  the  Chicago  Portage  the  furs  of  the  interior 
would  reach  Lake  Michigan  en  route  to  the  old  world  via  the 
St.  Lawrence  River,  while  supplies  for  his  colony  would  take  the 
same  course  in  return.  Thus  encircling  the  English  colonies  on 
the  coast  and  shutting  them  out  from  the  great  valley  whose  rich 
possibilities  he  dimly  foresaw.  La  Salle  dreamed  that  his  country- 
men would  monopolize  the  trade  of  the  interior  and  that  the  lilies 
of  France  would  float  above  the  commerce  of  the  New  World. 

In  view  of  the  fact  that  the  English  colonists  outnumbered 
the  French  about  ten  to  one,  this  scheme  of  the  great  La  Salle 
appears  chimerical.  It  must  be  remembered,  however,  that  during 
the  closing  years  of  La  Salle's  life,  "France  was  the  dominant 
power  in  Christendom."  The  armies  of  Louis  XIV  were  supreme 
upon  the  land;  La  Hogue  was  several  years  in  the  future;  the 
question  of  naval  supremacy  was  undecided,  and  England,  torn 
by  civil  war,  was  trembling  in  fear  of  a  French  invasion. 

But,  however  possible  the  realization  of  his  plan  may  have 
been  during  La  Salle's  lifetime,  the  opportunity  passed  forever 
when  England  won  the  sovereignty  of  the  seas  at  La  Hogue  in 
1692,  five  years  after  his  death.  Before  the  first  five  years  of  the 
new  century  had  passed,  the  Grand  Alliance  formed  by  the  skillful 
diplomacy  of  England  had  united  the  armies  of  Holland,  Spain, 
Germany  and  Savoy  with  her  own ;  the  genius  of  Marlborough 
had  made  the  little  Bavarian  town  of  Blindheim,  or  Blenheim, 
forever  memorable  as  the  scene  of  one  of  the  decisive  battles  of 
history  and   the  downfall   of  the   military   supremacy  of   France; 


OF  THE  CITY  OF  CHICAGO  31 

and  the  finger  of  destiny  had  begun  to  point  to  the  final  tragedy 
on  the  plains  of  Abraham. 

The  fate  of  Chicago  and  the  vast  garden  to  which  it  is  the 
gateway  was  to  be  settled,  not  alone  by  the  struggles  of  traders 
and  canoemen  and  savages  on  the  streams  and  portages  of  the 
interior,  but  by  the  shock  of  mighty  armies,  which  on  the  continent 
of  Europe  and  in  India,  as  well  as  in  America,  fought  for  the 
dominion  of  the  world. 

Nevertheless,  the  Mississippi  Valley  east  of  the  great  river 
witnessed  a  desperate  contest  in  the  first  half  of  the  eighteenth 
century  between  the  French  and  their  Indian  allies  on  the  one 
hand,  and  the  great  Indian  Confederacy  headed  by  the  Iroquois 
on  the  other.  Backed  by  the  English  and  Dutch  colonists,  who 
aimed  to  capture  the  rich  fur  trade  of  which  the  French  had  thus 
far  held  the  lion's  share,  a  fierce  attack  was  made  by  the  Fox 
Indians  upon  the  French  post  at  Detroit  in  1712.  This  assault  was 
repulsed  by  the  French  and  the  Ottawa  Indians  who  were  friendly 
to  them  and  later  the  Foxes  who  had  survived  the  battle  were 
pursued  and  most  of  them  destroyed  without  mercy. 

Three  years  later  Chicago  was  chosen  as  the  place  of  rendez- 
vous of  various  tribes  of  Indians  who,  under  French  leadership, 
were  conducting  a  campaign  against  the  Fox  stronghold  at  the 
portage  between  the  Fox  and  Wisconsin  rivers  in  the  State  of 
Wisconsin,  near  the  present  town  of  Portage,  Wis.  It  is  known 
that  other  parties  of  French  and  Indians  passed  through  Chicago 
during  the  half-century  of  Indian  warfare  which  began  with  the 
attack  upon  Detroit  in  1712,  and  ended  only  when  the  Treaty  of 
Paris  in  1763  finally  eliminated  France  as  a  factor  in  the  affairs 
of  the  New  World,  England  taking  all  her  possessions  east  of  the 
Mississippi ;  all  that  lay  west  of  the  Great  River,  as  well  as  the 
City  of  New  Orleans,  having  been  secretly  ceded  to  Spain  some 
time  before  the  Treaty  of  Paris  was  signed. 

Among  the  Indian  tribes  east  of  the  Mississippi  River  and 
north  of  the  Ohio  who  were  friendly  to  the  French  were  the 
Hurons,  Pottawotamies,  Miamis,  Weas,  Illinois,  Ottawas  and 
Chippewas,  while  among  their  enemies  were  the  Sacs,  Foxes, 
Mascoutins,  Kickapoos  and,  worst  of  all,  the  dreaded  Iroquois. 
The  latter,  instigated  by  English  traders  who  supplied  them  with 
guns  and  ammunition  (and  in  many  cases  by  English  officials), 
were  the  terror  of  the  continent.  Mr.  E.  G.  Mason's  statement 
in  "Chapters  from  Illinois  History,"  p.  113,  that  "they  had  carried 
their  arms  from  the  Gulf  of  St.  Lawrence  on  the  north  to  Florida 
on  the  south,  and  beyond  the  Mississippi  on  the  west"  is  undoubt- 
edly correct.  But  his  assertion  that  they  had  destroyed  more 
than  thirty  nations  and  caused  the  death  of  more  than  six  hundred 
thousand  persons  within  eighty  years,  is  certainly  a  very  great 
exaggeration,  based  probably  upon  a  statement  credited  to  Gallinee 


32  HISTORY  OF  THE  BOARD  OF  TRADE 

about  1680,  and  found  in  Margry,  Vol.  I,  p.  362,  that  the  Iroquois 
Indians  had  destroyed  "more  than  100,000  men,  comprising 
more  than  fifty  nations."  The  Bureau  of  American  Ethnology 
at  Washington  recently  estimated  that  "the  Iroquois  may  have 
destroyed  (i.  e.,  defeated,  dispersed  and  incorporated)  perhaps 
eight  or  ten  tribes,  and  may  have  killed  directly  or  indirectly  8,000 
or  10,000  Indians  in  these  v^^ars,  the  survivors  of  the  broken  tribes 
being  either  driven  to  more  remote  regions  or  incorporated  v^^ith 
other  tribes  or  with  the  victors." 

In  1717  the  "Illinois  Country,"  which  had  been  in  the  juris- 
diction of  Quebec,  was  annexed  to  Louisiana,  and  in  1721  it  was 
designated  the  Illinois  District,  one  of  the  nine  districts  into  which 
the  Colony  of  Louisiana  was  divided  by  the  Company  of  the  Indies. 
At  this  time  its  limits  extended  from  the  Arkansas  to  the  Illinois 
River,  on  both  banks  of  the  Mississippi. 

In  1718  the  French  began,  and  in  1720  completed,  Fort 
Chartres,  about  sixteen  miles  above  the  new  Indian  village  of 
Kaskaskia,  on  the  Mississippi  River,  and  about  fifty-four  miles 
south  of  the  present  city  of  St.  Louis,  Missouri.  In  its  time  it  was 
the  most  formidable  fortress  in  America  and  the  center  of  French 
power  in  the  West.  Before  the  completion  of  the  fort,  Philip 
Francis  Renault,  Director  General  of  John  Law's  Company  of 
the  Indies,  brought  a  large  number  of  negroes  from  Santo  Domingo, 
thus  introducing  African  slavery  into  Illinois.  In  1754  the  Seven 
Years  War  between  France  and  England  began  at  Great  Meadows 
in  the  forests  of  Pennsylvania  with  a  clash  between  the  Virginia 
troops  under  Col.  George  Washington  and  a  French  detachment 
under  Jumonville,  which  he  destroyed.  A  superior  French  force, 
to  which  Washington  in  turn  was  compelled  to  surrender  a  few 
weeks  later,  was  made  up  in  part  of  soldiers  from  the  garrison 
of  Fort  Chartres,  who  reached  the  scene  of  hostilities  by  way  of 
the  Mississippi  and  Ohio  rivers.  In  the  following  year.  Captain 
Aubrey,  with  400  men,  was  sent  from  Fort  Chartres  by  the  same 
\  route  to  re-enforce  Fort  Duquesne,  where  Pittsburgh  now  stands ; 

and  in  1759  another  detachment  from  Fort  Chartres  was  part  of 
the  French  force  defeated  by  Sir  William  Johnson  in  its  attempt 
to  raise  the  siege  of  Fort  Niagara. 

Things  went  from  bad  to  worse  with  the  French  in  India,  in 
Europe  and  in  America,  where  the  colonial  troops  were  of  great 
assistance  to  the  regular  soldiers  of  Great  Britain,  and  in  1763 
the  Treaty  of  Paris  ratified  the  decision  which  the  court  of  arms 
had  rendered  at  Louisberg  and  Quebec  some  years  before,  and 
the  New  France,  of  which  Champlain  and  La  Salle  had  dreamed, 
and  for  which  they  had  fought,  became  British  territory,  including 
the  "old  Illinois  country." 


OF  THE  CITY  OF  CHICAGO  33 

The  English  Rule 

The  defeat  of  the  French  was  complete,  but  occupation  of  the 
conquered  territory  by  its  new  masters  was  not  an  easy  matter. 
The  Indians  were  still  to  be  reckoned  with,  and  even  before  the 
Treaty  of  Paris  was  signed,  the  great  Chief  Pontiac  formed  a 
conspiracy  to  seize  all  the  English  posts  from  Pennsylvania  to 
Lake  Superior.  Most  of  them  were  taken  by  the  savages,  but 
Detroit  and  Fort  Pitt  (formerly  Fort  Duquesne)  held  out,"^  and 
in  the  following  year  the  Indians  between  the  lakes  and  the  Ohio 
River  were  forced  to  submit  to  the  palefaces  from  the  east.  On 
the  tenth  of  October,  1765,  Fort  Chartres  was  occupied  by  the 
British,  and  henceforth  their  control  over  Chicago  and  the  region 
tributary  to  it  was  limited  only  by  such  opposition  as  the  Indians 
could  make. 

In  1701  a  fort  and  trading  post  called  Fort  Pontchartrain  was 
established  at  Detroit  by  Antoine  de  La  Mothe  Cadillac.  It  soon 
became  the  headquarters  of  French  trade  and  influence  in  the 
Northwest.  The  fort  at  that  place  was  garrisoned  by  120  men, 
and  there  were  in  1776  about  350  others,  mostly  French,  in  the 
town  and  vicinity.  Vincennes  had  at  this  time  a  total  population 
of  two  or  three  hundred ;  Ouiatanon,  sixty  or  seventy  persons,  and 
the  settlements  at  Kaskaskia,  Cahokia  and  elsewhere  on  the 
American  bottom,  about  a  thousand  whites  and  as  many  Indians 
and  negroes,  most  of  the  latter  being  slaves.  As  late  as  1770 
there  were  few  permanent  settlements  on  the  north  side  of  the 
Ohio  River  below  Fort  Pitt;  and  but  for  those  at  the  other  points 
above  mentioned,  and  a  few  traders  here  and  there,  the  whole 
region  west  of  central  New  York  and  central  Pennsylvania  and 
north  of  the  Ohio  was  a  wilderness  when  the  Revolution  began 
in  1775. 

England  Opposed  to  Settlement  of  Northwest 

From  the  first  the  fur  trade  had  been  considered  of  such 
importance  that  the  British  government  discouraged  colonization 
of  the  Northwest.  Only  a  few  months  after  the  treaty  of  cession 
in  1763  the  Mississippi  Land  Company  was  formed,  "for  the  pur- 
pose of  planting  a  colony"  whose  boundaries  were  to  include 
several  thousand  square  miles  on  the  east  side  of  the  Mississippi 
River  from  a  point  one  hundred  and  twenty  miles  above  the 
mouth  of  the  Ohio  to  a  point  ninety  miles  below  that  junction, 
and  comprise  portions  of  southern  Illinois,  Indiana,  western  Ken- 

^  Governor  John  Reynolds  in  his  Pioneer  History  of  Illinois,  p.  7,  names 
the  following  forts,  trading  posts  and  settlements  which  were  to  be  destroyed: 
Detroit,  Mackinac,  Green  Bay,  St.  Joseph,  Ouiatenon  or  Weastown  on  the 
Wabash,  Miami,  Sandusky,  Presque  Isle,  Le  Boeuf,  Venango,  Ligonier,  Pitt, 
Bedford  and  Cumberland.  He  says:  "All  these  forts  perished  under  the  hand 
of  Pontiac,  except  three. 


34  HISTORY  OF  THE  BOARD  OF  TRADE 

tucky  and  Tennessee.  Among  the  stockholders  of  the  company 
were  George  Washington,  Richard  Henry  Lee  and  other  prominent 
men  in  Virginia  and  Maryland,  as  well  as  some  Englishmen.  Other 
companies  were  formed  for  a  similar  purpose,  perhaps  the  most 
ambitious  of  these  being  one  in  which  Governor  William  Franklin 
of  New  Jersey,  son  of  Benjamin  Franklin,  was  interested.  The 
proposed  boundaries  of  this  colony  included  all  of  the  present  State 
of  Illinois,  a  considerable  portion  of  Indiana,  a  small  part  of  Ohio 
and  Michigan,  and  the  southeastern  part  of  Wisconsin.  Both  of 
these  companies,  and  others,  had  agents  in  England,  who  for  several 
years  urged  their  claims  upon  the  British  ministry,  and  at  one  time 
with  some  prospect  of  success.  But  New  Orleans  was  the  only 
practicable  outlet  for  the  settlements  on  the  Mississippi  River, 
and  that  port,  as  well  as  all  the  vast  territory  of  Louisiana  west 
of  the  Mississippi,  was  in  the  hands  of  Spain.  The  most  remarkable 
and  persistent  effort  to  secure  a  large  grant  of  land  was  made  by 
a  British  subject  living  in  Kaskaskia,  who  in  June,  1773,  held  a 
council  with  the  chiefs  of  several  tribes  of  Illinois  Indians,  at  which 
time,  as  he  afterwards  claimed,  he  purchased  from  them,  for  five 
shillings,  and  certain  goods  and  merchandise,  two  tracts  of  land 
east  of  the  Mississippi.  One  of  them  extended  from  a  point  on  the 
Mississippi  River  about  eighteen  miles  below  the  mouth  of  the 
Illinois,  thence  up  the  Illinois  River  to  Chicagou  or  Garlick  Creek, 
thence  northerly  by  lines  which  are  so  indefinite  that  it  is  impos- 
sible to  follow  them,  to  the  place  of  beginning.  Murray  formed 
the  Illinois  Land  Company,  associating  other  Englishmen  with 
himself,  but  the  Revolutionary  War  broke  out,  and  in  1780  the 
company  was  reorganized  as  an  American  company,  a  constitution 
adopted,  and  a  plan  formed  for  the  settlement  of  the  tract  or  tracts, 
upon  the  establishment  of  peace.  For  some  reason  the  promoters 
considered  it  advisable  to  submit  their  claims  to  the  Congress  of 
the  United  States.  In  February,  1781,  they  offered  to  cede  to  the 
United  States  government  three-fourths  of  their  alleged  purchase, 
provided  the  United  States  would  confirm  their  title  to  the  remain- 
der. Subsequently  a  committee  of  the  House  of  Representatives 
reported  favorably,  but  the  report  of  the  Senate  committee  was 
adverse,  as  "In  the  opinion  of  the  committee,  deeds  obtained  by 
private  persons  from  the  Indians,  without  antecedent  authority,  or 
subsequent  information  from  the  Government,  could  not  vest  in  the 
grantees  mentioned  in  such  deed  a  title  to  the  lands  therein 
described."  Another  reason  given  by  the  Senate  committee  for  its 
adverse  report  was  the  patent  fact  that  "one  of  the  deeds  contains 
only  a  number  of  lines,  without  comprehending  any  land  whatever." 
Congress  wisely  adopted  the  report  of  the  Senate  committee,  and 
dismissed  the  petition.  Nevertheless  the  persistent  claimants  made 
two  subsequent  efforts  to  secure  favorable  action  upon  their  claims, 
but  without  success;  and  the  site  of  Chicago,  which  was  a  part 


OF  THE  CITY  OF  CHICAGO  35 

of  the  land  Murray  claimed  as  his  purchase,  was  ceded  to  the 
United  States  by  the  Indians  at  the  Treaty  of  Greenville  in  1795. 

In  1768,  General  Thomas  Gage,  commander-in-chief  of  the 
British  army  in  America,  who  prior  to  that  time  had  advocated 
a  western  colony,  changed  his  views  on  the  subject,  and  in  1770 
wrote  to  Lord  Hillsborough,  secretary  of  state  for  the  colonies, 
"that  no  further  time  or  money  should  be  expended  on  that  coun- 
try, and  particularly  the  Illinois  country,  because  it  would  be  of 
no  conceivable  advantage  to  the  king's  subjects,  unless  New  Orleans 
was  added  to  His  Majesty's  possessions."  In  1773  General  Gage 
wrote  to  Lord  Dartmouth,  who  had  succeeded  Lord  Hillsborough, 
"that  the  trade  of  the  Mississippi,  except  that  of  the  upper  parts 
from  whence  a  portion  may  go  to  Quebec,  goes  down  that  river; 
and  has,  as  well  as  everything  we  have  done  on  the  Mississippi; 
tended  more  to  the  benefit  of  New  Orleans  than  of  ourselves." 
Perhaps  the  English  view  cannot  be  more  plainly  stated  than  in 
the  report  of  the  Lords  of  Trade  to  the  Crown  in  1772.  They  say: 
"The  great  object  of  colonizing  upon  the  continent  of  North 
America  has  been  to  improve  and  extend  the  commerce,  naviga- 
tion and  manufactures  of  this  kingdom  ....  it  does  appear  to 
us  that  the  extension  of  the  fur  trade  depends  entirely  upon  the 
Indians  being  undisturbed  in  the  possession  of  their  hunting 
grounds ;  that  all  colonizing  does  in  its  nature,  and  must  in  its 
consequences,  operate  to  the  prejudice  of  that  branch  of  commerce. 
Let  the  savages  enjoy  their  deserts  in  quiet.  Were  they  driven 
from  their  forests  the  peltry  trade   would  decrease." 

To  their  extreme  solicitude  for  the  maintenance  of  the  fur 
trade,  and  their  chagrin  that  in  spite  of  their  expensive  occupation 
of  the  country  this  traffic  was  finding  its  way  to  New  Orleans, 
was  added  the  necessity  for  retrenchment  in  military  expenditure, 
owing  to  the  heavy  indebtedness  incurred  by  Great  Britain  in  the 
long  period  of  warfare  with  France. 

The   Revolution 

Probably  these  considerations  alone  would  have  been  suffi- 
cient to  prevent  favorable  action  by  the  British  government  upon 
the  petition  of  any  of  the  proposed  colonization  companies  for 
grants  of  land ;  but  as  the  dispute  between  the  colonies  and  the 
mother  country  over  the  question  of  taxation  became  more  acute, 
they  were  re-enforced  by  another,  less  creditable  to  the  humanity 
of  Great  Britain,  to  which  reference  will  be  made  later. 

The  revolt  of  the  colonies  on  the  Atlantic  Coast  met  with  no 
response  in  the  Northwest.  British  garrisons  held  the  important 
posts  at  Niagara,  Detroit,  Mackinaw,  Kaskaskia  and  Fort  Pitt, 
and  through  these  posts  and  the  control  of  navigation  on  the  Great 
Lakes  and  the  St.  Lawrence  River,  British  traders  remained  in 
undisturbed  possession  of  the  fur  traffic.     On  the  other  hand,  it 


36         HISTORY  OF  THE  BOARD  OF  TRADE 

is  unlikely  that  the  French  and  Canadians  who  comprised  the 
greater  part  of  the  settlements  then  existing  had  an  excessive  love 
for  the  invaders  who  had  conquered  their  countrymen  a  few  years 
before.  Indeed,  it  was  the  knowledge  George  Rogers  Clark 
obtained  as  to  the  lukewarm  allegiance  of  the  French  settlers  in 
the  neighborhood  of  Kaskaskia  which  led  him  in  the  spring  of 
1778  to  organize  the  daring  expedition  that  resulted  in  the  capture 
by  Clark  and  his  Virginia  riflemen  of  Kaskaskia  and  Cahokia, 
the  only  British  posts  west  of  Chicago.  During  the  darkest  days 
of  the  Revolution,  while  Washington  and  his  ragged  and  starving 
soldiers  were  suffering  inconceivable  privation  at  Valley  Forge, 
Clark,  having  obtained  the  sanction  of  Patrick  Henry,  Governor 
of  Virginia,  collected  about  one  hundred  and  fifty  men  at  Redstone, 
Pennsylvania,  on  the  Monongahela.  Descending  this  river  and 
the  Ohio,  he  secured  reinforcements  at  Pittsburgh,  and  at  the  Falls 
of  the  Ohio,  where  Louisville  now  stands,  landed  at  Fort  Massac, 
marched  a  hundred  and  twenty  miles  through  the  forest,  and  sur- 
prised and  captured,  not  only  Kaskaskia,  Cahokia  and  the  other 
French  settlements  of  the  "Illinois  country"  on  the  Mississippi, 
but  Fort  Gage  as  well,  with  its  garrison.  Fort  de  Chartres  having 
been  abandoned  in  1772  by  the  British  commander  on  account  of 
the  ravages  of  the  Mississippi  River.  In  October,  1778,  the  legis- 
lature of  Virginia  passed  an  act  establishing  as  the  "country  of 
Illinois"  all  that  part  of  Virginia  west  of  the  Ohio  or,  in  other 
words,  the  Northwest  Territory.  In  the  following  winter.  Colonel 
Clark,  with  170  men,  who  endured  terrible  hardships,  made  his 
famous  march  across  the  country  to  Fort  Vincennes,  Indiana, 
which,  with  its  British  garrison  under  Lieutenant-Governor  Ham- 
ilton, he  captured  by  a  spectacular  attack.  On  the  twenty-fifth  of 
February,  1779,  the  Americans  took  possession  of  the  fort  and,  in 
honor  of  the  governor  of  Virginia,  named  it  Fort  Patrick  Henry. 
The  British  had  held  the  place  only  a  little  more  than  two  months, 
and  its  occupation  was  only  one  step  in  Hamilton's  plan  for  the 
recapture  of  Fort  Gage  and  the  French  settlements  on  the  Missis- 
sippi. In  his  post  at  Detroit,  on  the  sixth  of  August,  1778,  Hamil- 
ton received  news  of  Colonel  Clark's  great  exploit  at  Kaskaskia. 
He  immediately  began  preparations  for  the  recovery  of  the  lost 
posts,  and  started  on  the  seventh  of  October  with  a  force  of  two 
hundred  whites  and  three  hundred  Indians  for  Post  Vincennes, 
the  people  of  that  settlement  having  been,  meanwhile,  persuaded 
by  Father  Gibault,  an  emissary  of  Colonel  Clark,  to  submit  to 
the  Americans.  An  estimate  by  a  recent  writer  of  eight  thousand 
as  the  number  of  warriors  who  could  be  mustered  by  the  Indian 
tribes  north  and  west  of  the  Ohio  river  and  east  of  the  Mississippi 
at  this  time  equals  the  number  of  Iroquois,  Delawares  and  Wyan- 
dots  as  estimated  by  Sir  William  Johnson  in  1768.  Nearly  all  of 
them  were  hostile   to  the   Americans,  and  they  were  encouraged 


OF  THE  CITY  OF  CHICAGO  37 

by  the  British  to  attack  the  settlements,  and  promised  rewards 
for  scalps. 

Unforeseen  delays  caused  Hamilton's  original  plans  to  mis- 
carry, but  he  occupied  Vincennes  December  seventeenth,  the  gar- 
rison of  two  men  having  capitulated  after  stipulating  that  they 
should  be  allowed  the  honors  of  war.  He  planned  at  once  a  grand 
converging  movement  of  his  Indian  allies  upon  Kaskaskia  for  the 
spring  of  1779.  One  of  these  bands  of  Indians  under  Charles  de 
Langlade,  a  young  halfbreed  fur  trader  from  Wisconsin,  was  to 
follow  the  west  shore  of  Lake  Michigan  from  Green  Bay  to  the 
Illinois  River  by  way  of  Chicago.  Another  band  from  the  upper 
Mississippi  under  Gautier  was  to  descend  that  river  to  Kaskaskia, 
while  the  Michigan  Indians  (Ottawas,  Chippewas  and  Pottawato- 
mies)  were  to  join  Hamilton  himself  at  Vincennes  and  accompany 
him  from  Vincennes  to  the  Mississippi  settlements.  It  was  a 
promising  scheme,  but  Clark  spoiled  it  all  by  the  surprise  and 
capture  of  Vincennes  and  the  dispatch  of  his  prisoners,  including 
Hamilton,  under  guard  to  Virginia.  When  the  Indians  from  the 
north,  who  were  already  on  the  way,  learned  of  Hamilton's  defeat 
and  capture,  they  returned  to  their  own  villages,  and  preposterous 
stories  of  "Mr.  Clark's"  doings  produced  a  panic  in  the  garrisons 
of  Mackinac  and  Detroit.  During  the  remaining  years  of  the 
Revolutionary  War  the  British,  with  their  Indian  allies,  made  vig- 
orous but  futile  attempts  to  recover  their  lost  ground  south  of 
the  lakes. 

Clark,  having  retired  to  his  base  of  supplies  at  the  Falls  of 
the  Ohio,  was  within  supporting  distance  of  the  Illinois  settle- 
ments, and  his  defence  of  the  region  he  had  brought  under  the 
American  flag  was  materially  assisted  by  the  French-Spanish 
attacks  upon  Saint  Joseph.  At  the  same  time  the  British  expe- 
dition under  Sinclair  against  Saint  Louis  wasted  resources  which 
might  have  given  the  Americans  much  annoyance.  A  portion  of 
Sinclair's  force,  defeated  at  Saint  Louis,  retreated  by  the  way  of 
the  Illinois  River,  and  at  Chicago  its  destruction  was  averted  by 
a  rescuing  force  which  arrived  in  two  small  vessels  from  the  north. 

Saint  Joseph,  Michigan,  was  at  this  time  a  far  more  important 
place  than  Chicago.  A  census  taken  in  June,  1780,  showed  that  it 
contained  forty-eight  French  and  halfbreed  inhabitants. 

The  Pottawotamie  Indians  occupied  the  country  around  the 
head  of  Lake  Michigan  from  Saint  Joseph  to  Chicago,  and  the 
former  appears  to  have  been  one  of  their  most  important  head- 
quarters. Fort  Miami  at  this  place  had  not  been  garrisoned  since 
the  massacre  at  the  time  of  Pontiac's  Conspiracy  in  1763,  but  the 
trading  post  did  a  thriving  business  with  the  Indians,  and  carried 
a  large  stock  of  goods.  Early  in  December,  1780,  a  small  party  of 
Frenchmen  from  Cahokia,  under  Jean  Baptiste  Hamelin,  made 
a  raid  upon  the  traders  at  Saint  Joseph  while  the  Indians  were 


o8  HISTORY  OF  THE  BOARD  OF  TRADE 

absent  on  their  first  hunt,  "loaded  their  goods  on  packhorses,  and 
with  twenty-two  prisoners"  started  for  Chicago.  (Quaife,  p.  99.) 
A  few  days  later  they  were  overtaken  by  the  Indians  under  a 
British  officer,  at  a  place  known  as  Petite  Fort,  which  is  said  to 
have  been  near  the  Calumet  River,  and  only  three  of  the  raiders 
escaped. 

A  little  more  than  two  months  after  this  raid,  a  force  of  some 
sixty  Spaniards  from  St.  Louis  and  Frenchmen  from  Cahokia, 
with  two  hundred  Indians,  again  captured  and  plundered  St.  Joseph, 
and  raising  the  flag  of  Spain,  took  formal  possession  of  the  country 
in  the  name  of  his  Catholic  Majesty.  They  remained  only  one  day, 
returning  to  St.  Louis  without  the  loss  of  a  man,  and  upon  this 
short  occupation  the  Spaniards  based  their  claim  that  they  had 
conquered  the  western  country  from  Great  Britain  during  the 
Revolution.  It  was  the  knowledge  of  this  claim,  and  of  the  apparent 
purpose  of  France  and  Spain  to  restrict  as  far  as  possible  the  terri- 
torial expansion  of  the  United  States,  which,  in  1782,  caused  the 
American  Commissioners  to  negotiate  a  separate  treaty  of  peace 
with  England,  in  violation  of  the  terms  of  the  alliance  between 
France  and  the  United  States. 

During  all  the  years  of  disorder  in  the  western  country,  begin- 
ning with  the  Iroquois'  attack  upon  the  Illinois  Indians  at  the 
original  village  of  Kaskaskia  in  1680,  Chicago  was  known  only 
because  of  its  portage,  which,  in  a  favorable  stage  of  water,  afforded 
easy  transit  from  Lake  Michigan  to  the  Illinois  River.  Doubtless 
some  Pottawatomie  Indians  lived  near  it ;  but  the  fact  that  no 
important  trading  post  was  located  there  shows  that  the  Indian 
population  in  the  immediate  neighborhood  was  not  very  large. 
Indian  and  Frenchman,  Canadian,  Englishman,  and  American, 
priest  and  soldier,  trader  and  explorer,  crossed  the  Chicago 
Divide  on  errands  of  trade  or  war,  or  to  convert  the  savages 
to  the  Catholic  faith ;  but  they  left  the  place  as  they  found 
it;  and  after  a  century  of  struggle  for  the  mastery  of  the  North- 
west, which  now  contains  about  one-fifth  of  the  people  of  the 
United  States,  the  issue  was  decided  by  the  surrender  of  Lord 
Cornwallis  at  Yorktown,  and  by  the  tenacity  with  which  Col. 
George  Rogers  Clark  held  his  positions  on  the  Ohio  and  Missis- 
sippi rivers. 

After  the  Revolution 

When  the  Treaty  of  Paris  was  signed  in  1783,  and  Great 
Britain  acknowledged  the  independence  of  the  United  States, 
agreeing  that  the  boundary  between  the  two  nations  should  run 
through  the  center  of  the  water  communications  of  Lakes  Ontario, 
Erie,  Huron  and  Superior  to  the  Lake  of  the  Woods,  and  thence 
west  to  the  source  of  the  Mississippi  River,  the  American  people 
had  a  right  to  expect  that  the  Indian  savages  would  no  longer  be 


OF  THE  CITY  OF  CHICAGO  39 

encouraged  by  Englishmen  to  continue  their  inhuman  warfare  upon 
the  defenceless  women  and  children  of  the  border.  But  England, 
though  defeated  and  humiliated  by  the  result  of  war,  cherished  the 
idea  that  the  people  of  the  newly  emancipated  states  would  soon 
quarrel  among  themselves,  and  that  one  state  after  another  would 
ask  to  be  taken  back  into  the  British  Empire.  George  III  expressed 
this  view,  and  unfriendly  British  navigation  laws  were  enacted, 
apparently  for  the  purpose  of  showing  the  "rebels"  that  their 
liberty  was  an  expensive  luxury.  Furthermore,  the  profitable  fur 
trade  of  the  lake  region  was  entirely  in  the  hands  of  Canadian 
and  British  traders,  and  their  monopoly  of  this  trafific  and  conse- 
quent control  of  the  Indians  assured  Great  Britain  a  savage  ally 
in  the  event  of  future  hostilities  between  herself  and  the  Americans. 
She  refused,  therefore,  to  surrender  the  northwestern  posts,  as 
provided  by  the  Treaty  of  Paris,  and  soon  assumed  to  exercise 
a  protectorate  over  the  Indian  tribes  on  American  soil. 

In  1787  Congress  adopted  "An  ordinance  for  the  government 
of  the  territory  of  the  United  States  northwest  of  the  River  Ohio," 
the  conflicting  claims  of  Virginia,  New  York,  Connecticut  and 
Massachusetts  upon  this  region  having  been  previously  relin- 
quished in  favor  of  the  federal  government ;  and  in  1788  Marietta, 
at  the  junction  of  the  Ohio  and  Muskingum  rivers,  was  founded, 
and  American  settlement  of  the  Northwest  Territory  (as  it  was 
known  until  its  subdivision  into  the  territories  of  Ohio,  Indiana, 
Illinois,  Michigan  and  Wisconsin)   began. 

Whatever  censure  may  be  justly  made  of  the  action  of  indi- 
vidual white  men  in  their  intercourse  with  the  Indians,  the  policy 
of  the  United  States  government  towards  the  aborigines  has  been 
from  the  first  characterized  by  forbearance  and  equity.  Pursuant 
to  this  humane  policy  the  government  had,  before  opening  the  lands 
northwest  of  the  Ohio  to  settlers,  bought  them  from  the  Indian 
claimants,  under  the  treaties  at  Fort  Mcintosh,  January  21,  1785, 
at  the  mouth  of  the  Miami,  January  31,  1786,  and  these  treaties  were 
ratified  January  9,  1789,  by  a  treaty  at  Fort  Harmar,  negotiated  by 
General  St.  Clair,  the  territorial  governor  of  the  Northwestern 
Territory. 

The  British  government,  for  reasons  already  mentioned,  deter- 
mined to  prevent,  if  possible,  American  settlement  beyond  the 
Ohio  River.  Unwilling  to  inaugurate  another  war  with  the  United 
States,  the  claim  was  put  forward  that  the  Iroquois  Indians  of 
western  New  York,  the  faithful  allies  of  the  English  during  the 
Revolution,  had,  by  their  victories  over  the  tribes  northwest  of  the 
Ohio  many  years  before,  established  some  sort  of  suzerainty  over 
them,  and  that  the  latter  could  not  alienate  their  lands  without 
the  consent  of  their  overlords,  the  Iroquois.  (Critical  Period  of 
American  History,  John  Fiske,  p.  203.)  This  point  was  yielded 
by  the  United  States  in  some  of  the  treaties   (Ibid,  203),  but  the 


40  HISTORY  OF  THE  BOARD  OF  TRADE 

British  demand  that  all  interviews  between  the  Americans  and 
the  Indians  should  be  held  in  the  presence  of  Canadian  officials 
was  intolerable,  and  was  intended  to  provoke,  and  did  provoke, 
hostile  acts  on  the  part  of  the  Indians.  The  latter  carried  on 
their  barbarous  warfare  upon  American  settlers  and  their  families, 
and  the  English  government  disclaimed  responsibility  for  their 
acts.  Two  expeditions  against  the  hostile  Indians,  one  under 
General  Harmar  in  1790,  and  one  under  General  St.  Clair  in  1791, 
met  with  defeat,  the  latter  expedition  resulting  in  the  loss,  in 
killed  and  wounded,  of  more  than  900  men,  about  one-half  of 
the  number  engaged  on  the  American  side. 

Even  after  this  disaster,  which  had  encouraged  other  Indian 
tribes  to  join  the  revolt,  and  after  Colonel  Hardin  and  Major 
Trueman  were  murdered  by  the  hostiles,  to  whom  they  had  been 
sent  on  a  mission  of  peace,  the  government  still  tried  to  avoid  a 
general  war  with  the  Indians. 

After  St.  Clair's  defeat,  the  English  officials  openly  encouraged 
the  Indians  in  their  nefarious  work  and  openly  supplied  them  with 
arms  and  ammunition,  as  they  previously  had  done  under  cover. 
The  time  had  come  when  the  United  States  was  obliged  to  crush 
the  Indians,  or  see  the  shameful  campaign  in  which  the  latter  had 
been  the  instruments  of  Great  Britain  successful,  and  the  North- 
west Territory  again  subject  to  the  British  crown.  "Mad  Anthony" 
Wayne,  the  hero  of  Stony  Point,  was  chosen  for  the  work.  By 
constant  drill,  and  by  careful  attention  to  all  the  details  of  military 
life,  Wayne  created  an  efficient  army,  with  which  he  occupied 
the  site  of  St.  Clair's  defeat,  where  he  built  Fort  Recovery. 
Repulsing  an  attack  made  on  the  fort  by  a  force  of  two  thousand 
Indians,  he  moved  forward  into  the  heart  of  the  hostile  country 
and  built  Fort  Defiance  on  the  Maumee  River.  Skillfully  screening 
his  movements  by  an  efficient  force  of  scouts,  led  in  part  by  William 
Wells,  who  will  appear  later  as  the  hero  of  the  Chicago  Massacre, 
he  struck  the  Indians  and  their  Canadian  and  British  allies  at 
Fallen  Timbers,  routed  them  and  pursued  them  to  the  walls  of 
a  fort  which,  for  their  encouragement,  the  British  commander  at 
Detroit  had  built  and  garrisoned  with  three  companies  of  British 
regulars.  After  destroying  the  houses  and  stores  of  the  British 
agents  and  traders  adjoining  the  fort,  Wayne  laid  waste  the  villages 
and  cornfields  of  the  Indians  along  the  Maumee  River,  strength- 
ened his  forts,  built  a  new  fort,  which  was  named  Fort  Wayne, 
upon  the  site  of  the  modem  city  of  that  name,  and  went  into  winter 
quarters  at  Greenville,  Ohio.  British  emissaries  tried  to  induce 
the  Indians  to  continue  the  war,  but  the  latter  were  thoroughly 
beaten,  and  doubtless  dissatisfied  because  their  pale-faced  allies 
had  failed  to  come  to  their  assistance  in  the  hour  of  supreme  need. 
Finally  the  Indians  submitted,  and  the  Treaty  of  Greenville  was 
signed  August  10,  1796.    In  a  general  way  it  recognized  the  Ameri- 


OF  THE  CITY  OF  CHICAGO  41 

can  title  to  the  lands  in  more  than  half  of  what  is  now  the  State 
of  Ohio,  including  all  as  far  west  as  Cleveland,  and  the  whole  of 
the  southern  part  of  the  state,  as  well  as  the  southeastern  corner 
of  Indiana.  Other  provisions  included  various  reservations,  most 
of  them  for  the  establishment  of  forts,  the  free  passage  of  the 
rivers  and  portages  connecting  the  proposed  chain  of  forts,  and 
the  free  use  of  the  Chicago  harbor,  river  and  portage  and  the 
Illinois  River.  Among  the  reservations  was  one  at  the  mouth  of 
the  Illinois  River,  another  at  Lake  Peoria  and,  most  important  of 
all,  "One  piece  of  Land  Six  Miles  square  at  the  Mouth  of  'Chickago' 
River  emptying  into  the  Southwest  end  of  Lake  Michigan  where 
a  fort  formerly  stood." 

The  British  surrendered  the  Northwestern  posts  during  the 
summer  and  fall  of  1796,  according  to  the  terms  of  a  treaty  nego- 
tiated by  John  Jay  in  1794,  and  one  potent  cause  of  irritation 
between  the  two  nations  was  thereby  removed. 

Wayne's  signal  victory  over  the  Indians  at  Fallen  Timbers 
in  1794,  and  the  Treaty  of  Greenville  which  resulted  from  it,  pre- 
served the  Northwest  from  open  hostilities  between  the  races  for 
fifteen  years.  During  this  time  the  stream  of  immigration  from 
the  Eastern  States,  long  restrained  by  the  border  warfare,  and 
heretofore  diverted  to  Kentucky  and  Tennessee,  which  were  pop- 
ulous enough  to  be  admitted  to  the  Union  as  States,  the  former 
in  1792  and  the  latter  in  1796,  began  to  pour  into  the  newly  opened 
lands  in  eastern  and  southern  Ohio.  A  census  taken  in  1800  showed 
45,028  white  inhabitants  within  the  limits  of  the  State,  and  in 
1803  Ohio  was  admitted  to  the  Union,  all  the  remainder  of  the 
Northwest  Territory  having  been  set  off  in  1800  under  the  name 
of  Indiana  Territory  when  Ohio  was  erected  into  a  separate  terri- 
tory preparatory  to  statehood.  The  advancing  wave  of  home- 
seekers  did  not,  however,  stop  within  the  region  ceded  by  the 
Indians,  and  even  in  1800  the  white  population  of  the  newly- 
erected  Indiana  Territory  was  nearly  5,000.  The  frontier  had 
advanced  westward  many  hundred  miles,  but  the  adjustment  of 
relations  between  the  Indians  and  the  whites  was  as  difficult  as 
it  was  when  the  border  lay  just  outside  the  settlements  at  Plymouth 
and  Jamestown. 

Rights  and  Wrongs  of  the  Indians 

A  vast  amount  of  unnecessary  emotion  has  been  excited  about 
the  treatment  of  the  "nation's  wards,"  and  the  entire  term  of 
existence  of  the  American  people  has  been  stigmatized  as  a  "Cen- 
tury of  Dishonor."  It  is  easy  to  cite  examples  of  selfishness,  of 
vice,  of  fraud  and  dishonesty  on  the  part  of  white  men  in  their 
dealings  with  the  natives.  It  is  easy  to  point  to  crimes  of  violence 
committed  by  white  men  upon  the  Indians  for  which  juries  of 
white  men  refused  to  convict  the  criminals.     While  General  Har- 


42  HISTORY  OF  THE  BOARD  OF  TRADE 

rison  was  Governor  of  the  Indiana  Territory,  a  party  of  Indian 
men,  women  and  children  was  murdered  by  "three  white  villains" 
for  the  sake  of  a  few  furs  valued  at  about  fifty  dollars.  Governor 
Harrison  made  strenuous  efforts  to  secure  the  punishment  of  the 
wretches,  but  because  of  the  active  sentiment  against  punishing 
white  men  for  killing  Indians,"  (Quaife,  181),  he  could  accomplish 
nothing. 

Colonel  Hamtramck  told  General  St.  Clair,  in  1790,  "The  people 
of  our  frontiers  will  be  the  first  to  break  any  treaty.  The  people 
of  Kentucky  will  carry  on  private  expeditions  and  will  kill  Indians 
whenever  they  meet  them,  and  I  do  not  believe  there  is  a  jury  in 
all  Kentucky  who  would  punish  a  man  for  it."  ("Westward  Move- 
ment," Winsor,  p.  421.)  No  one  who  has  had  any  acquaintance 
with  the  frontier  can  doubt  that  this  disregard  for  the  lives  and 
property  of  Indians  has  been  a  characteristic  of  the  border  since 
the  first  settlement  of  the  country. 

Nevertheless,  those  who  indict  the  people  of  the  nation  because 
of  the  criminal  faithlessness  of  frontier  juries  are  as  mistaken  in 
their  judgments  as  those  who  insist  that  the  only  good  Indian  is 
the  one  who  is  dead.  Trouble  was  inevitable  when  the  white  man 
with  his  insatiable  hunger  for  land,  and  the  red  man  with  his  inap- 
peasable  thirst  for  liquor,  came  into  contact.  Each  would  bargain 
for  the  thing  he  desired  most,  and  a  conflict  could  have  been 
avoided  only  by  a  stoppage  of  all  intercourse  between  individuals 
of  the  two  races  and  an  agreement  on  the  part  of  the  United 
States  that  all  the  lands  in  the  Northwest  should  remain  forever 
the  common  property  of  all  the  tribes,  none  of  it  to  be  sold  by  the 
tribe  occupying  any  portion  of  it  without  the  consent  of  all.  This 
is  the  demand  made  by  the  Indian  Council  at  the  mouth  of  the 
Detroit  River  in  1786,  and  formulated  again  by  Tecumseh  and 
his  brother,  the  Prophet,  during  the  half-dozen  years  preceding 
the  outbreak  of  the  War  of  1812.  In  both  cases  British  officials 
were  active  in  fomenting  trouble  for  the  Americans.  (See  Michi- 
gan Pioneer  Collections,  Vol.  11,  pp.  467-469.) 

Who  was  to  blame  for  all  the  bloodshed  of  the  border  war- 
fare? God,  only,  knows.  The  result  of  the  long  conflict  between 
the  races  has  been  so  inexpressibly  sorrowful  to  the  Indian  that 
no  one  can  repress  a  feeling  of  pity  for  the  weaker  race.  Because 
of  this  feeling,  men  and  women  who  live  remote  from  the  border, 
and  whose  knowledge  of  the  "noble  red  man"  has  been  obtained 
from  works  of  fiction,  find  pleasure  in  erecting  a  standard  of  inter- 
racial ethics,  whose  finality,  according  to  their  view,  admits  of  no 
question.  The  white  man  was  the  intruder  and,  therefore,  the 
guilty  party,  according  to  these  would-be  moralists. 

A  fairly  respectable  argument  can  be  made  to  prove  that  the 
first  European  who  landed  at  St.  Augustine,  or  Jamestown,  or 
Plymouth,  or   Quebec,   should   have   remained  only   long  enough 


OF  THE  CITY  OF  CHICAGO  43 

to  purchase  necessary  provisions  for  his  return  voyage,  and  then 
should  have  sailed  at  once  for  the  land  whence  he  came.  But  he 
did  not;  and  with  every  new  immigrant  new  ethical  problems  arose, 
until  presently  their  complexity  baffled  human  judgment.  Modern 
civilization  is  based  upon  the  right  of  property,  and  especially 
the  right  to  hold  landed  property.  The  Indian's  conception  of  this 
theory  was,  to  say  the  least,  very  vague.  Barring  the  little  patch 
of  ground  where  his  squaw  cultivated  a  few  hills  of  corn,  he  saw 
no  value  in  land  except  as  a  place  to  hunt  for  game.  A  grove  of 
walnut  trees,  a  forest  of  oak  or  pine,  which  today  would  be  worth 
a  king's  ransom,  was  valuable  to  the  Indian  only  as  firewood.  The 
coal,  the  marble,  the  limestone,  the  granite,  the  oil,  the  iron,  the 
zinc,  the  lead,  the  ores  of  precious  metals  were  absolutely  without 
value  to  him.  The  site  of  the  great  metropolis  was  a  worthless 
sand  dune  and  swamp.  Conceding  for  the  sake  of  argument  the 
validity  of  his  title,  a  pocket  mirror,  a  string  of  beads,  a  hatchet 
or  a  gun  was  really  of  more  value  to  him  than  the  land  he  gave  in 
exchange  for  it. 

But  what  was  his  title  based  upon?  Not  occupancy  certainly, 
nor  use.  Estimates  of  the  number  of  Indians  in  North  America 
at  the  coming  of  the  white  men  vary  widely.  Probably  the  nearest 
approach  to  accuracy  is  attained  by  the  Bureau  of  American 
Ethnology,  which,  in  1910,  estimated  that  north  of  Mexico  there 
were,  at  the  period  referred  to,  1,150,000  Indians,  of  whom  846,000 
were  within  the  present  limits  of  the  United  States.  The  bureau 
also  estimated  that  the  total  1,150,000  had  been  reduced  to  about 
403,000  in  1910,  a  loss  for  the  whole  continent  (north  of  Mexico) 
of  sixty-five  per  cent.^ 

Disregarding  the  increase  in  numbers  since  the  Indian  wars 
ceased,  and  assuming  that,  roughly  speaking,  one-half  of  the  Indian 
population  of  the  United  States  originally  lived  east  of  the  Missis- 
sippi River,  and  one-fourth  thereof  north  of  the  Ohio,  and  that  the 
percentage  of  loss  in  that  section  up  to  the  year  1812  was  66^  per 
cent  (it  certainly  was  greater  than  the  average  loss  for  the  whole 
continent),  it  would  seem  conservative  to  estimate  the  Indian 
population  of  the  Northwest  Territory  in  1812  at  50,000  persons. 

These  50,000  Indians,  divided  into  more  than  forty  tribes,  with- 
out anything  resembling  a  national  organization  or  control,  hunted 
and  fished  over  about  248,000  square  miles  of  land;  or,  in  other 

'  Jedediah  Morse's  report  to  the  Secretary  of  War  in  1820  estimated  the 
number  of  Indians  at  that  date  as  follows: 

Ohio    2,407 

Indiana  and  Illinois 17,006 

Michigan  and  Northwest  Territory 28,380 

47,793 
John  Moses  in  "Illinois,  Historical  and  Statistical,"  Vol.  I,  p.  244,  esti- 
mates the  number  in  Illinois,  in  1809,  at  about  18,000. 


44  HISTORY  OF  THE  BOARD  OF  TRADE 

words,  about  sixteen  thousand  acres  to  each  family  of  five  persons. 
They  had  not  bought  it ;  they  did  not  use  it  (except  an  insignificant 
portion).  Furthermore,  they  had  been  at  war  with  the  Americans 
for  a  hundred  and  fifty  years.  They  had  listened  to  the  evil  counsels 
of  French  and  English,  and  had  begun  hostilities  over  and  over 
again  in  time  of  peace  by  their  favorite  amusement  of  murdering 
defenceless  women  and  children.  By  all  the  laws  of  war  (their 
own  as  well  as  the  European)  their  lands  and  their  property  were 
at  the  mercy  of  the  conquerors.  They  were  at  war  among  them- 
selves most  of  the  time,  and  in  case  of  defeat  by  other  Indians, 
their  lives  were  forfeited  as  well  as  their  property.  Most  of  the 
Northwest  territory,  as  we  have  seen,  had  been  devastated  by  the 
inter-tribal  Indian  wars  of  the  seventeenth  and  eighteenth  centuries, 
and  a  large  number  of  the  aborigines  had  been  killed  by  the  Iroquois 
and  other  tribes  allied  with  them.  The  only  title  which  any  of  the 
Indians  recognized  to  the  land  they  used  as  their  hunting  ground 
was  the  ability  to  hold  it  against  hostile  attack. 

Now,  this  was  the  difficult  situation  which  confronted  the 
American  people  when,  by  successful  warfare  against  Great  Britain 
and  her  allies,  the  Indians,  they  had  acquired  sovereignty  over  the 
trans-Ohio  country.  On  the  one  hand,  a  white  population  justly 
exasperated  by  a  hundred  and  fifty  years  of  Indian  treachery  and 
barbarity,  among  whom  there  were  few  of  the  older  families  who 
had  not  suffered  the  loss  of  some  relative  or  friend  by  tomahawk 
or  scalping  knife,  or  by  the  more  horrible  fate  of  captivity.  The 
generation  then  living  had  had  sad  experience  of  the  malignity  of 
these  savage  foes,  and  ample  opportunity  to  learn  at  Wyoming  and 
Cherry  Valley  that  the  stories  of  Haverhill  and  Deerfield  which 
they  had  heard  from  their  grandsires  were  neither  idle  tales  nor 
exaggerations  of  the  truth. 

On  the  other  hand  there  was  the  Indian,  unable  to  comprehend 
the  white  man's  rules  of  land  tenure  ;  crowded  out  of  his  hunting 
grounds  by  the  constant  encroachment  of  the  Americans ;  incited 
to  warfare  against  them,  now  by  the  French,  and  now  by  the 
English,  only  to  suffer  defeat  and  additional  loss;  infuriated  by  the 
realization  that  the  tide  of  immigration  was,  as  Tecumseh  expressed 
it,  "a  mighty  water  ready  to  overflow  his  people,"  and  by  the  out- 
rages committed  by  lawless  white  men  upon  Indians  for  which 
no  redress  could  be  obtained. 

Doubtless  the  infinite  wisdom  and  boundless  love  of  the  Man 
of  Calvary  could  have  devised  some  better  method  of  adjusting 
the  conflicting  interests  of  two  utterly  incompatible  social  organ- 
izations than  the  mutual  slaughter  which  ensued.  Judged  by  the 
religion  of  love  He  taught,  our  countrymen,  or  some  of  them  at 
least,  have  from  the  beginning  fallen  far  short  of  their  duty  towards 
the  Indians,  just  as  every  individual  of  the  countless  millions  who, 
during  the  past  nineteen  hundred  years  have  professed  themselves 


OF  THE  CITY  OF  CHICAGO  45 

followers  of  the  lowly  Nazarene,  has  come  short  of  his  duty  in 
every  situation  in  life.  But  judged  by  the  rule  of  force  which  has 
always  governed  human  affairs,  and  especially  the  relations  of 
communities  at  war  with  each  other,  the  treatment  of  the  Indians 
by  the  United  States  government  has  been  characterized  by  the 
utmost  generosity  and  forbearance. 

The  simple  question  of  equity  as  it  presented  itself  when  the 
first  white  man  landed  on  the  shores  of  America  had  become 
hopelessly  complicated  by  the  innumerable  points  of  contact  due 
to  the  increase  of  white  population,  the  growth  of  property  values, 
the  duties  of  one  member  of  the  social  organization  to  another, 
and  the  duties  of  parents  and  husbands  as  protectors  of  those 
dependent  upon  them.  In  place  of  the  lone  sailor  who,  by  stepping 
into  his  boat  and  pushing  out  a  bow-shot  from  the  shore,  could 
have  settled  the  "Indian  question,"  there  was,  when  the  Revolu- 
tionary War  closed,  a  vast  population  of  several  millions,  touching 
the  Indians  along  a  frontier  of  two  thousand  miles.  Chained  to 
this  frontier  by  family  ties,  by  property  interest,  and  by  social 
duties,  our  ancestors  of  that  day  could  not  escape  from  the  environ- 
ment to  which  a  century  and  a  half  of  colonial  dependance  had 
brought  them.  During  all  the  years  of  subjection  to  Great  Britain 
they  had  been  encouraged  to  fight  their  way  into  the  wilderness 
which  hemmed  them  in  on  the  West.  Their  arms  had  been  instru- 
mental in  winning  the  Inland  Empire  for  the  British  Crown,  and 
in  expelling  France  from  the  Continent  of  North  America;  and 
finally,  goaded  by  injustice,  they  had  thrown  off  the  yoke  of  their 
masters  and  accepted  the  independent  responsibilities  of  admin- 
istration which  previously  belonged  to  Great  Britain,  the  dominant 
power.  Prisoners  of  their  environment,  justly  resentful  towards 
the  "Punic  faith"  of  the  English,  who  continued  to  incite  the 
Indians  to  atrocities  long  after  a  treaty  of  peace  was  signed,  waiving 
their  rights  as  conquerors  of  a  foe  whose  unparalleled  cruelty  to 
women  and  children,  whose  fiendish  pleasure  in  the  infliction  of 
unnecessary  suffering  upon  a  helpless  enemy  warranted  his  exter- 
mination, our  ancestors  at  once  adopted  the  policy  of  purchasing 
the  land  from  the  Indians,  which  the  United  States  has  ever  since 
pursued. 

Early  Settlers 

The  first  white  man  who  lived  in  Chicago  after  the  close  of 
the  mission  of  the  Guardian  Angel,  already  referred  to,  appears 
to  have  been  Pelate  de  Saint  Ange.  He  came  from  Mackinac 
about  1765,  bringing  with  him  his  wife,  who  was  born  of  French 
parents  at  St.  Joseph,  Michigan,  1734.  St.  Ange  died  some  years 
later  and  his  widow  moved  to  Cahokia,  St.  Clair  County,  Illinois, 
where  she  was  twice  remarried,  and  where  she  died  in  1843,  at 
the  age  of  109  years.    She  is  said  to  have  had  a  wonderful  influence 


46  HISTORY  OF  THE  BOARD  OF  TRADE 

over  the  Pottawatomies  and  other  Indian  tribes,  and  to  have  saved 
the  whites  from  massacre  on  many  occasions. 

A  trader  named  Guarie  is  said  to  have  had  a  cabin  on  the  west 
side  of  the  north  branch  of  the  Chicago  River  near  the  Forks,  as 
early  as  1778.  Gurdon  S.  Hubbard,  in  his  autobiography  (p.  41), 
says  that  "the  field  he  cultivated  was  traceable  on  the  prairie  by 
the  distinct  marks  of  the  corn  hills"  at  the  time  he  came  to  Chicago 
in  1818.  The  North  Branch  of  the  Chicago  River  was  called  the 
"Gary"  river  in  1823  by  Keating.     (Vol.  I,  p.  176.) 

A  notable  character  of  the  early  days  was  a  negro  of  mixed 
blood  and  unknown  origin  named  Jean  Baptiste  Point  du  Sable, 
said  by  Mrs.  Kinzie  to  have  been  a  native  of  San  Domingo,  and 
by  Matson  ("French  and  Indians  of  Illinois  River,"  pp.  187-191) 
to  have  been  a  runaway  slave  from  the  vicinity  of  Lexington, 
Kentucky.  Mrs.  Kinzie  says  he  died  in  Peoria.  (Waubun,  p.  191.) 
It  seems  probable  that  he  was  at  Chicago  as  early  as  1779.  In  the 
same  year  he  was  arrested  at  the  River  Chemin  (probably  on  the 
present  site  of  Michigan  City,  Indiana)  by  a  British  officer  who 
had  been  sent  from  Mackinac  to  oppose  Colonel  George  Rogers 
Clark's  design  upon  that  post.  He  found  Point  du  Sable  in  pos- 
session of  a  stock  of  goods  which  belonged,  as  was  shown  later, 
to  a  British  trader  named  Durand,  in  whose  employ  he  was. 
Among  the  articles  in  his  inventory  were  ten  20-gallon  casks  of 
rum,  which  were  worth  nearly  twice  as  much  as  all  the  balance 
of  his  stock.     (Quaife,  p.  140.) 

Andreas  says  of  him :  "Here  he  lived  until  1796 — seventeen 
years.  All  that  is  known  of  his  life  during  that  long  period  is 
gathered  from  the  'Recollections'  of  Augustin  Grignon  of  Butte 
des  Morts,  near  Oshkosh,  and  published  in  the  third  volume  of 
the  Wisconsin  Historical  Society's  collections." 

Mr.  Grignon  says,  "At  a  very  early  period  there  was  a  negro 
lived  there,  named  Baptiste  Point  de  Saible.  My  brother.  Perish 
Grignon,  visited  Chicago  about  1794,  and  told  me  that  Point  de 
Saible  was  a  large  man ;  that  he  had  a  commission  for  some  office, 
but  for  what  particular  office  I  can  not  now  recollect.  He  was 
a  trader,  pretty  wealthy,  and  drank  freely."  It  seems  probable 
that  in  1796  he  sold  his  cabin  and  returned  to  St.  Louis  or  to 
Peoria,  where,  according  to  proof  which  he  made  before  a  govern- 
ment commission,  he  had  improved  a  farm  of  thirty  acres  as  early 
as  1780. 

Another  early  settler  worthy  of  mention  is  Antoine  Ouilmette, 
a  French-Canadian  or  half-breed  Indian,  who  claimed  to  have 
settled  in  Chicago  in  1790,  and  who  continued  to  live  there  until 
1825,  when  he  was  assessed  upon  property  valued  at  four  hundred 
dollars,  and  even  later,  for  in  1833  he  signed  the  petition  for  the 
establishment  of  St.  Mary's  Catholic  Church,  the  first  church  of 
that  faith  in  Chicago.     His  wife  was  an  Indian  woman. 


OF  THE  CITY  OF  CHICAGO  47 

Another  early  settler  was  Joseph  Le  Mai,  a  half-breed  whose 
wife  was  a  Pottawatomie  squaw.  He  is  said  to  have  bought  from 
Point  du  Sable,  in  1796,  the  cabin  which  he  sold  to  John  Kinzie, 
and  to  which  Kinzie  brought  his  family  from  Bertrand,  or  St. 
Joseph,  Michigan,  in  1804,  after  Fort  Dearborn  was  built  to  protect 
the  white  settlers. 

Fort  Dearborn 

No  government  on  earth  can  command  the  respect  of  its  own 
people,  or  of  aliens,  unless  it  possesses  the  means  of  enforcing 
submission  to  its  decrees.  Somewhere,  as  an  attribute  of  its 
sovereignty,  there  must  reside  a  power  and  a  will  to  compel 
the  obedience  of  those  lawless  individuals  who  are  found  in 
every  community,  and  who  menace  the  existence  of  despotic 
and  liberal  institutions  alike.  Nor  is  the  existence  of  this  power 
and  determination  alone  sufficient.  Even  in  the  most  civilized 
states  there  must  be  some  visible  token  of  the  adequacy  of  the 
power,  and  some  tradition,  at  least,  of  its  use  when  required. 
There  must  be  some  ship  of  war,  some  fortress,  some  soldiers, 
some  memory  of  Saratoga,  or  Yorktown,  or  Gettysburg,  or  Manila 
Bay. 

If  civilized  communities,  after  nineteen  centuries  of  more  or 
less  strict  adherence  to  Christian  ideals,  can  be  kept  in  order 
only  by  frequent  exhibition  of  the  potential  ability  to  punish  infrac- 
tions of  law,  still  more  necessary  was  the  display  of  this  power 
among  the  Indian  savages,  who,  in  their  relations  with  the  whites 
at  least,  recognized  only  the  law  of  force,  and  who  were  embittered 
by  what  they  considered  the  intrusion  of  the  Americans,  and  their 
unfairness  in  occupying  the  lands  which  had  been  the  hunting 
grounds  of  the  red  men  from  time  immemorial. 

It  is  not  surprising,  therefore,  that  when  the  United  States,  in 
1796,  came  into  possession  of  the  fortified  posts  in  the  Northwest 
Territory,  its  officials  soon  realized  the  necessity  of  establishing  a 
fort  farther  west  than  Detroit  and  Mackinac,  which  were  then  the 
extreme  outposts  in  that  direction.  Detroit,  Fort  Wayne  and 
Vincennes  marked  in  a  general  way  the  frontier  settlements ;  but 
north  and  west  of  the  line  connecting  these  posts  extended  for 
five  or  six  hundred  miles  the  Indian  country,  in  which  there  were 
no  white  communities  of  importance  except  those  at  Kaskaskia 
and  Cahokia  on  the  American  Bottom  below  St.  Louis.  Detroit 
and  Mackinac  were  well  situated  to  control  what  is  now  the  State 
of  Michigan,  but  useless  as  bases  from  which  to  administer  the 
affairs  of  the  wilderness  beyond  the  Great  Lakes,  where  lawless 
whites  were  to  be  repressed  as  well  as  Indian  depredations  to  be 
prevented.  It  was  found,  too,  that  the  change  from  British  to 
American  sovereignty  was  merely  nominal  so  far  as  the  Indians 
were  concerned,  because  they  were  still  held  to  the  British  interest 


48  HISTORY  OF  THE  BOARD  OF  TRADE 

by  the  Canadian  fur  traders  who  continued  to  control  that  branch 
of  traffic. 

Military  and  political  considerations  combined  to  indicate 
Chicago  as  the  proper  place  at  which  to  locate  a  fort.  It  was  in 
the  center  of  the  Indian  country,  at  the  head  of  navigation  on  the 
Great  Lakes,  easily  supplied  and  re-enforced  from  Detroit  and 
Mackinac,  and  not  difficult  of  access  from  the  white  settlements 
on  the  Mississippi  below  St.  Louis.  As  early  as  1798  there  were 
rumors  that  a  post  was  to  be  established  at  Chicago  in  the  autumn 
of  that  year,  but  no  action  was  taken  until  March  9,  1803,  when 
the  Secretary  of  War,  General  Henry  Dearborn,  through  Adjutant 
and  Inspector  General  Thomas  H.  Gushing,  directed  Colonel  Ham- 
tramck,  commanding  the  post  at  Detroit,  to  send  an  officer  and 
six  men,  with  one  or  two  guides,  through  the  Michigan  forests 
to  the  mouth  of  the  St.  Joseph  River,  and  thence  around  the  lake 
shore  to  Chicago,  in  order  to  determine  the  practicability  of  this 
route  for  the  march  of  a  company  of  soldiers  who  were  to  garrison 
the  proposed  fort.  This  reconnoitering  party  was  to  blaze  a  trail, 
note  suitable  camping  places,  investigate  the  food  resources  of 
the  region  through  which  it  was  to  pass,  and  select  a  site  at 
St.  Joseph  where  the  company  could  encamp  temporarily  while 
quarters  were  being  prepared  in  Chicago.  If  conditions  were  found 
favorable,  Colonel  Hamtramck  was  directed  to  send  the  garrison 
for  the  Chicago  fort  by  this  overland  route  under  command  of  a 
"discreet,  judicious  captain"  with  pack  horses  for  provisions  and 
light  baggage,  and  to  send  by  sailing  vessel  around  the  lakes  two 
pieces  of  light  artillery,  the  necessary  supply  of  ammunition,  and 
proper  "tools  and  other  equipment  for  the  erection  and  maintenance 
of  a  strong  stockade  post  at  Chicago"  (Quaife,  p.  130).  Thus, 
eight  weeks  before  the  Louisiana  Purchase  Treaty  was  signed,  and 
more  than  seven  months  before  it  was  ratified  by  Congress,  the 
War  Department  decided  to  build  and  garrison  a  fort  at  Chicago, 
a  project  which  had  been  urged  upon  the  French  government  more 
than  a  century  earlier  by  Louvigny  and  Mautet,  who  proposed  to 
organize  a  trading  and  exploring  expedition  to  the  southwest. 
The  government  of  France  did  not  look  with  favor  upon  this 
scheme,  and  nothing  was  done  about  it.' 

1  Most  historians  assume  that  there  was  a  fort  at  Chicago  during  at  least 
a  portion  of  the  French  regime.  A  recent  writer  (M.  M.  Quaife,  pp.  42-50) 
combats  this  view  with  vigor.  Like  many  political  and  religious  disputes 
which  have  deluged  the  world  with  human  blood,  this  moot  question  is  one 
of  definitions.     What  is  a  fort? 

Quaife  does  not  deny  that  La  Salle,  in  the  winter  of  1682,  erected  some 
sort  of  defensive  viforkto  which  he  referred  in  a  letter  written  June  4,  1683, 
as  a  "fort,"  and  which  Mason  (p.  144)  refers  to  as  "the  first  known  structure 
of  anything  like  a  permanent  character  at  Chicago";  but  he  insists  that  "a  log 
hut  constructed  by  two  men,  and  never  garrisoned  by  any  regular  force, 
hardly  merits  the  designation  of  a  fort  in  the  ordinary  acceptance  of  this 
term,  even  though  it  was  surrounded  by  a  stockade." 

Surely,  this  "fort,"  like  many  "forts"  now  existing  along  the  sea  coast 


OF  THE  CITY  OF  CHICAGO  49 

The  century,  and  more,  which  had  passed  from  the  abandon- 
ment of  the  Guardian  Angel  Mission  in  the  year  1700  to  the  arrival 
of  the  American  soldiers  who  were  to  build  and  occupy  the  new 
fort  in  Chicago,  on  the  seventeenth  of  August,  1803,  were  momentous 
years  in  the  history  of  the  world,  and  especially  in  the  annals  of 
America.  Russia  had  become  a  power  of  the  first  rank,  England 
had  supplanted  France  as  the  leading  world  power  and  expelled 
her  from  the  continent  of  North  America,  only  to  be  herself  expelled 
from  the  choicest  portion  of  her  possessions  by  the  revolt  of  her 
colonies  on  the  Atlantic  seaboard,  and  to  find  her  European  leader- 
ship again  challenged  by  the  Emperor  Napoleon.  The  colonies, 
growing  in  population  and  power,  had  occupied  the  forests  of 
New  York,  Pennsylvania,  Maryland  and  Virginia,  crossed  the 
Alleghenies,  and  poured  a  sufficient  number  of  settlers  into  the 
West  to  add  the  States  of  Kentucky,  Tennessee  and  Ohio  to  the 
Union,  the  latter  having  been  admitted  to  statehood  February  19, 
1803,  just  before  the  order  was  given  to  build  a  fort  at  Chicago. 
But  amid  the  shifting  of  the  balance  of  power  in  Europe,  the  suc- 
cessful assertion  of  American  independence  and  the  rapid  westward 
advance  of  the  Republic,  Chicago  stood  still.  The  slight  importance 
given  it  in  the  early  French  days  by  the  easy  portage  between  the 
waters  of  the  Illinois  River  and  Lake  Michigan  was  lost  when  the 
trade  of  the  settlements  on  the  American  Bottom  was  diverted 
to  New  Orleans.  White  settlement  of  the  region  more  immediately 
tributary  to  Chicago  was  impossible  because  of  the  hostility  of 
the  natives,  and  the  Indian  population  had  been  so  greatly  reduced 
by  causes  heretofore  explained  that  the  fur  trade  was  much  less 
than  formerly.  The  romance  associated  with  the  exploration  of 
this  unknown  region,  involving  privation,  danger  and  sufifering  for 
a  political  or  religious  ideal,  faded  with  the  disappearance  of  the 
heroes  of  the  cross  or  sword  whose  deeds  inspired  it ;  and  there 
were  left  at  the  settlement  on  the  Chicago  River,  when  the  Ameri- 
can troops  arrived  there,  as  the  result  of  a  hundred  and  thirty  years 
of  effort,  only  the  splendid  memories  of  Joliet,  Marquette,  Tonti 
and  La  Salle,  and  the  sordid  lives  of  three  French  and  half-breed 
Indians  who,  with  their  squaws  and  papooses,  composed  the  entire 
population  of  the  village,  if  such  it  could  be  called. 

The  officer  selected  by  the  War  Department  to  command 
the  new  post  was  Captain  John  Whistler,  First  Regiment,  United 
States   Infantry,   an    Irishman   of   English   lineage,   who   came   to 

of  the  United  States  would  be  useless  as  a  defense  against  modern  weapons; 
but  a  log  hut  surrounded  by  a  stockade  and  defended  by  resolute  men,  even 
with  the  firearms  of  that  period,  might  have  been  impregnable  to  the  assault 
of  Indians  armed  only  with  tomahawks  and  bows  and  arrows,  or  even  with 
muskets  unless  the  besieged  were  greatly  outnumbered. 

Mr.  Quaife's  contention  that  the  "fort  at  Chicagoa"  to  which  Tonti 
refers  in  1693,  and  which  it  has  been  asserted  was  garrisoned  in  1685-6  by 
sixty  men  under  command  of  M.  de  la  Durantaye,  was  really  the  fort  at  St. 
Joseph,  Mich.,  has  in  its  favor  some  negative  evidence,  but  little  proof. 


so  HISTORY  OF  THE  BOARD  OF  TRADE 

America  with  the  troops  under  Burgoyne  and  was  captured  by 
the  Americans  at  Saratoga.  After  receiving  his  discharge  from  the 
British  army,  he  returned  to  America  and  settled  in  Hagerstown, 
Maryland.  In  1791  he  joined  the  American  army,  and  served  on 
the  northwestern  frontier  until  1815. 

The  overland  route  from  Detroit  to  Chicago  through  the  forests 
of  Michigan  and  Indiana  having  been  found  practicable  for  march- 
ing troops,  Captain  Whistler,  who  was  out  of  health,  accepted 
the  offer  of  James  Strode  Swearingen,  a  lieutenant  of  artillery, 
who  volunteered  to  lead  the  command  to  Chicago,  Captain  Whistler 
himself,  with  his  family,  going  from  Detroit  by  the  schooner  Tracy, 
which,  under  command  of  Lieutenant  Dorr,  also  carried  provisions 
and  military  stores  for  the  new  post. 

The  march  of  the  troops  under  Lieutenant  Swearingen  was 
without  incident.  Leaving  Detroit  July  14,  they  reached  the  mouth 
of  the  St.  Joseph  River  two  weeks  later,  where  they  were  made 
happy  on  the  twelfth  of  August  by  the  arrival  of  the  "Tracy"  with 
provisions,  of  which  they  were  in  need.  Two  days  later  they 
resumed  their  march  along  the  lake  shore,  arriving  at  the  Chicago 
River  at  two  o'clock  on  the  afternoon  of  August  17,  1803,  having 
covered  the  ninety  miles  from  the  St.  Joseph  in  three  days. 

The  "big  canoe  with  wings"  was  a  source  of  wonder  to  the 
Indians,  who  collected  in  great  numbers  to  view  the  strange 
apparition. 

Lieutenant  Swearingen  makes  the  following  entry  in  his 
journal  under  date  of  August  17,  1803 :  "Proceeded  on  our  march 
at  6  o'clock  A.  M.,  34  miles  and  encamped  on  the  Chicago  River  at 
2  o'clock  P.  M.  This  river  is  about  30  yards  wide  where  the 
garrison  is  intended  to  be  built,  and  from  18  feet  and  upwards 
deep,  dead  water,  owing  to  its  being  stopped  up  at  the  mouth  by 
the  washing  of  sand  from  the  lakes.  The  water  is  not  fit  to  use. 
The  bank  where  the  fort  is  to  be  built  is  about  8  feet  high  and 
a  half-mile  above  the  mouth.  The  opposite  bank  is  not  so  high, 
not  being  a  difference  of  more  than  two  feet,  by  appearances.  The 
banks  above  are  quite  low." 

Here,  on  the  sand  dunes  which  stretched  along  the  lake  shore 
for  miles  to  the  southward,  was  laid  the  foundation  of  the  first 
structure  representing  the  visible  power  of  the  United  States,  north 
of  the  French  settlements  at  and  near  Kaskaskia,  and  west  of  the 
Great  Lakes. 

The  Site  of  Chicago 

Never,  since  Venice  rose  above  the  waters  of  the  Adriatic, 
was  there  a  less  promising  site  for  a  great  metropolis  than  the 
dreary  waste  along  the  banks  of  the  sluggish  stream,  near  the 
mouth  of  which  Captain  Whistler  was  to  build  his  stockade.  The 
eight-foot  elevation  of  the  point  chosen  for  the  fort,  just  south  of 


OF  THE  CITY  OF  CHICAGO  SI 

where  Rush  Street  bridge  now  stands,  afforded  good  drainage, 
but  towards  the  west  the  ground  sloped  to  a  slough  which  dis- 
charged its  waters  into  the  river  near  the  spot  where  State  Street 
now  crosses  that  stream.  Farther  west  the  ground  was  low  and 
there  was  "a  quantity  of  underwood  and  shrubby  bushes,  such 
as  prickly  ash,  etc."  South  of  the  Forks,  there  was  a  narrow  belt 
of  timber  along  the  South  Branch,  and  about  a  mile  south  of  the 
Forks,  and  east  of  the  timber,  a  meadow,  from  which  in  later 
years  the  garrison  was  supplied  with  hay.  Upon  the  sand  dunes 
along  the  lake  shore  already  referred  to  were  occasional  clumps 
of  small  trees,  one  of  which,  afterwards  known  as  "The  Pines," 
was  about  half  a  mile  south  of  the  fort ;  and  near  this  grove  of 
stunted  pines  the  Chicago  River  emptied  into  Lake  Michigan. 
Once  the  mouth  of  the  river  had  been  near  where  it  is  today,  but 
prior  to  the  time  now  under  consideration  northeast  winds  had 
completely  blocked  its  egress  to  the  lake  by  a  sandbar  which 
extended  southward  nearly  to  "The  Pines"  and  forced  the  river 
to  make  a  sharp  bend  around  the  high  ground  selected  for  the 
fort,  and  to  flow  southward  parallel  with  the  shore  of  the  lake,  about 
as  far  as  the  Madison  Street  of  today,  where  across  a  sand  bar  it 
succeeded  in  finding  an  outlet  near  "The  Pines."  South  of  Madison 
Sreet  and  west  of  the  sand  dunes  began  the  prairie  which  Captain 
Whistler,  some  years  later,  said  was  "of  great  extent." 

On  the  north  side  of  the  river  the  banks  of  the  main  stream 
were,  for  the  most  part,  high  enough  for  drainage,  and  much  of  the 
land  was  wooded,  the  heaviest  forest  being  adjacent  to  the  North 
Branch.  In  the  vicinity  of  the  modern  North  Franklin  Street, 
however,  a  well-defined  bayou,  which  began  about  half  a  mile 
farther  north,  discharged  its  waters  into  the  river. 

Life  at  the  Fort 

Lieutenant  Swearingen  returned  to  Detroit  on  the  "Tracy." 
Captain  Whistler  and  his  family,  which  included  his  wife  and  his 
son.  Second  Lieutenant  William  Whistler  and  his  young  wife, 
were  made  as  comfortable  as  circumstances  would  permit  in  a 
cabin  belonging  to  one  of  the  three  traders,  Ouilmette,  Le  Mai  and 
Pettle,  who  then  comprised  the  business  community  of  Chicago, 
while  the  enlisted  men  lived  in  tents. 

A  scarcity  of  draught  animals  and  the  want  of  necessary  tools 
and  supplies  for  the  men  delayed  work  upon  the  fort,  and  there 
was  much  bilious  fever  among  the  troops  during  the  late  summer 
and  autumn.  The  sickness  abated  when  colder  weather  set  in,  and, 
luckily,  the  early  part  of  the  winter  was  open  enough  to  prevent 
suffering  among  the  soldiers,  who  were  still  under  canvas,  or  in 
temporary  huts.  That  Captain  Whistler  prosecuted  the  work  to 
the  best  of  his  ability  is  shown  by  a  letter  from  Colonel  Kingsbury, 
congratulating  him  upon  the  accomplishment  of  so  much  with  his 


^2  HISTORY  OF  THE  BOARD  OF  TRADE 

insufficient  resources.  But  even  at  the  date  of  this  letter,  July 
12th,  1804,  the  fort  was  not  finished,  and  half  of  the  garrison  were 
ill  with  the  fever  and  other  diseases.  Similar  reports  of  sickness 
came  from  nearly  all  the  western  posts,  where  fever  and  ague  made 
life  a  burden  during  a  considerable  part  of  the  year.  Lieutenant 
Rhea,  on  the  Maumee,  reported  half  his  men  on  the  sick  list,  and 
"musketoes"  "so  thick  that  a  well  person  cannot  sleep  at  night." 
He  thinks  it  was  never  intended  that  a  Christian  should  be  posted 
at  such  a  place. 

Life  at  a  frontier  army  post  in  time  of  peace  is  irksome  at 
best,  and  doubly  so  it  must  have  been  to  the  ofificers  and  men  of 
all  the  western  posts  where  "fever  and  ague"  prevailed  exten- 
sively. Nowhere  could  this  feeling  of  loneliness  and  isolation  have 
been  more  acute  than  at  Fort  Dearborn,  the  farthest  outpost  of  the 
United  States,  west  of  the  Lakes,  surrounded  as  it  was  by  Indians, 
ftever  really  friendly,  and  soon  to  come  under  the  influence  of 
Tecumseh  and  his  brother  the  Prophet. 

Tecumseh  and  the  Prophet 

This  remarkable  Indian,  the  offspring  of  a  Shawnee  father 
and  a  Cherokee  mother,  was  born  near  the  site  of  the  present  city 
of  Springfield,  Ohio,  about  1770.  He  participated  in  the  battle 
at  Fallen  Timbers  under  Blue  Jacket,  in  August,  1794,  but  did  not 
take  part  in  the  council  resulting  in  the  Treaty  of  Greenville  in 
the  following  year.  He  soon  became  known  as  an  orator,  and 
a  chief,  and  in  1805  settled  in  Greenville,  Ohio,  with  several  bands 
of  Shawnee  Indians.  Tecumseh  saw,  with  clear  vision,  that  contact 
vvith  the  whites  was  bringing  the  people  of  his  race  to  poverty  and 
vice,  and  would  result  in  their  extinction  in  the  near  future.  He 
hated  the  Americans  with  his  whole  soul,  and  was  ably  seconded 
in  his  propaganda  against  them  by  his  brother,  known  as  the 
Prophet,  who  played  upon  the  superstitious  nature  of  the  Indians, 
claiming  to  receive  from  the  Great  Spirit  revelations  of  His  will. 
The  great  project  to  unite  all  the  western  Indians  in  an  alliance 
against  the  Americans  seems  to  have  taken  form  about  1804,  and 
in  1806  the  Prophet  sent  to  the  tribes  far  and  near  this  pretended 
revelation  from  the  Great  Spirit : 

"I  am  the  father  of  the  English,  of  the  French,  of  the  Span- 
iards, and  of  the  Indians.  I  created  first  the  man,  who  was  the 
common  father  of  all  these  people,  as  well  as  yourselves ;  and  it  is 
through  him,  whom  I  have  awaked  from  his  long  sleep,  that  I  now 
address  you.  But  the  Americans  I  did  not  make.  They  are  not 
my  children,  but  the  children  of  the  evil  spirit.  They  grew  from 
the  scum  of  the  great  waters  where  it  was  troubled  by  the  evil 
spirit,  and  the  froth  was  driven  into  the  woods  by  a  strong  east 
wind.  They  are  numerous,  but  I  hate  them.  *  *  *  j  ^m  now 
On  the  earth,  sent  by  the  Great  Spirit  to  instruct  you.    Each  village 


OF  THE  CITY  OF  CHICAGO  S3 

must  send  me  two  or  more  principal  chiefs  to  represent  you,  that 
you  may  be  taught.  *  *  *  Those  villages  which  do  not  listen 
to  this  talk  and  send  me  two  deputies  will  be  cut  off  from  the  face 
of  the  earth." 

This  skillful  appeal  brought  many  hundreds  of  pilgrims  to  the 
Prophet's  shrine,  and  in  the  following  year  the  English,  anticipating 
war  with  the  United  States  over  the  "Chesapeake"  affair,  turned 
the  excitement  to  good  account  by  summoning  the  American 
Indians  to  Maiden  to  receive  presents  of  guns,  ammunition  and 
other  supplies,  which  they  distributed  to  them  with  a  liberal  hand. 
(Travels  Through  the  States  of  North  America,  Weld,  Vol.  II, 
Letter  34.) 

Territories  of  Michigan  and  Illinois 

In  1805  (January  11th)  Congress  passed  an  act  setting  off  from 
Indiana  Territory  all  that  portion  thereof  lying  north  of  a  line  due 
east  from  the  southern  extremity  of  Lake  Michigan  and  naming  it 
The  Territory  of  Michigan.  On  the  third  of  February,  1809,  Indiana 
Territory  was  again  divided,  the  act  of  Congress  setting  off  The 
Territory  of  Illinois,  which  embraced  all  of  the  present  states  of 
Illinois  and  Wisconsin  and  the  northern  peninsula  of  Michigan.  ; 

Tippecanoe 

Meanwhile  the  influence  of  the  greatest  man  of  the  Indian  race 
continued  to  increase,  and  in  June,  1809,  a  large  number  of  war- 
riors from  various  tribes  under  his  leadership  gathered  at  the 
"Great  Clearing,"  where  Tippecanoe  Creek  empties  into  the  Wabash 
River.  Here,  a  hundred  and  fifty  miles  north  of  Vincennes  and 
a  hundred  miles  southeast  of  Fort  Dearborn,  they  were  instructed 
by  the  Prophet  and  urged  to  abstain  from  liquor,  preparatory  to 
the  forcible  assertion  of  what  they  were  taught  to  believe  their 
rights.  "From  Florida  to  Saskatchewan,"  it  is  said,  the  Prophet's 
teachings  influenced  the  lives  and  habits  of  the  Indians.  (Quaife, 
p.  189.)  Tecumseh  traveled  far  and  wide,  urging  the  adoption  of 
his  plan  for  a  union  of  all  the  tribes,  and  in  1810,  at  the  Council 
of  Vincennes,  boldly  informed  General  Harrison  of  his  intention 
to  stop  the  encroachments  of  the  whites,  and  demanded  that  the 
lands  purchased  from  the  Indians  by  several  recent  treaties,  and 
including  portions  of  Ohio  and  much  of  Indiana,  should  be  relin- 
quished, and  those  treaties  set  aside  under  threat  of  war. 

Numerous  acts  of  violence  occurred  at  scattered  points  along 
the  border;  horses  were  stolen,  men  murdered  and,  the  settlers 
becoming  alarmed,  appealed  to  Governor  Harrison  for  protection. 
Believing  their  fears  well  grounded,  he  assembled  a  force  of  about 
800  men,  marched  to  Tippecanoe  Creek,  and  went  into  camp  about 
three  miles  from  the  Prophet's  Indian  village.  Here  he  was  attacked 
after  midnight,  November  7th,   1811,  by  the  Prophet  and  his  fol- 


54  HISTORY  OF  THE  BOARD  OF  TRADE 

lowers,  the  latter  having  been  made  to  believe  that  their  leader's 
incantations  had  made  them  immune  to  the  bullets  of  the  "Long 
Knives,"  as  they  called  the  Americans.  After  a  desperate  fight,  in 
which  both  sides  lost  heavily,  the  Indians  were  repulsed,  and 
Tecumseh  (who  was  absent  at  the  time)  upon  his  return  denounced 
his  brother  for  the  premature  attack,  which  prevented  the 
consummation  of  his  great  plan. 

Acts  of  Violence  in  Chicago  and  Vicinity 

Through  all  these  years  of  turmoil  along  the  Wabash  and  its 
tributaries,  Chicago  and  the  Illinois  country  in  general  were  not 
seriously  disturbed.  Not  that  the  Indians  in  this  region  were 
unaffected  by  the  great  unrest  for  which  Tecumseh  and  his  brother 
were  responsible,  or  that  they  were  really  friendly,  but  there  was 
no  great  outbreak.  As  early  as  June,  1805,  Black  Bird,  one  of  the 
chiefs  who  afterwards  took  part  in  the  massacre  of  the  garrison 
of  Fort  Dearborn,  went  to  Maiden  to  solicit  the  help  of  the  British 
authorities  against  the  Americans. 

A  year  later,  in  June,  1806,  Captain  Wells  at  Fort  Wayne 
was  told  by  a  French  trader  that  the  Ottawas,  Chippewas  and 
Pottawatomies  intended  to  surprise  Detroit,  Mackinac,  Fort  Wayne 
and  Chicago. 

"In  1808,  Jouett,  the  agent  at  Chicago,  reported  that  the 
neighboring  Indians  were  planning  a  visit  to  the  Prophet." 

"In  1810  the  Indians  of  Illinois  committed  a  series  of  depreda- 
tions and  murders  along  the  Mississippi  border.  (Quaife,  193.) 
In  July  four  white  men  were  killed  near  Portage  des  Sioux  by  a 
band  of  marauding  Indians  engaged  in  a  horse-stealing  expedition." 

Governor  Harrison  and  Governor  Edwards  both  tried  to  secure 
the  surrender  of  the  criminals,  but  without  success.  One  of  them 
was  Nuscotnemeg,  who  participated  in  the  Chicago  massacre. 
Main  Poc,  who  made  demonstrations  against  Fort  Dearborn  in 
1808,  was  active  in  this  delivery. 

Such  outrages  as  these  had  been  ordinary  incidents  along  the 
border  ever  since  Miles  Standish  in  Massachusetts  and  Captain 
John  Smith  in  Virginia  stood  between  the  colonists  and  destruc- 
tion. But  these  atrocities  in  Illinois  were  the  work  of  small  bands 
of  Indians,  and  while  they  displayed  the  prevalence  of  a  hostile 
spirit  on  the  part  of  the  savages,  there  were  many  of  the  older 
men  among  them  who  were  as  friendly  to  the  whites  as  they  dared 
to  be,  and  there  was  no  general  outbreak. 

That  no  great  battle  (except  the  massacre  at  Chicago)  between 
the  races  ever  occurred  within  the  present  limits  of  the  state  of 
Illinois  was  due  in  part  to  the  fact  that,  before  the  frontier  advanced 
into  her  territory,  Indian  power  had  spent  itself  in  contests  with 
the  whites  farther  east,  and  also  to  the  greater  distance  of  Illinois 
from  Canada,  where  "their  'British  Fathers,'  as  they  called  them, 


OF  THE  CITY  OF  CHICAGO  55 

had  subsidized  all  the  tribes  north  of  the  Ohio,  *  *  *  by  an 
annual  distribution  of  presents  at  Maiden,  Canada,  about  twenty 
miles  below  Detroit.     (History  of  Illinois,  Blanchard,  p.  50.) 

Garrison  Quarrels 

Some  of  the  officers  at  Fort  Dearborn,  in  default  of  active 
service,  found  time  to  indulge  the  petty  jealousies  which  often 
impair  the  efficiency  of  a  garrison  similarly  situated  and  disfigure 
the  records  of  those  who  take  part  in  them.  There  is  nothing  to 
indicate  that  Captain  Whistler  was  not  an  exceptionally  capable 
post  commander,  but  his  age  and  infirmities  offered  opportunity 
for  the  formation  of  a  cabal  among  ambitious  juniors,  and  during 
almost  seven  years  that  he  commanded  the  post  there  were  two 
serious  feuds,  in  which  civilians  as  well  as  officers  of  the  army 
took  part.  So  many  charges  and  countercharges  had  been  made, 
that  in  A'pril,  1810,  the  War  Department  relieved  Captain  Whistler 
and  ordered  him  to  Detroit  to  take  command  there.  This  transfer 
was  in  the  nature  of  a  vindication  of  Captain  Whistler,  as  Detroit 
was  a  two-company  post,  "the  largest  and  most  important  military 
station  in  the  Northwest,"  while  Mackinac,  Fort  Wayne,  Fort 
Harrison,  near  Terre  Haute,  and  Fort  Dearborn  were  all  one- 
company  posts. 

John  Kinzie 

If  life  at  the  fort  was  dull  (save  for  the  quarrels)  during  the 
years  after  the  post  was  established,  it  was  otherwise  outside  the 
palisades.  John  Kinzie,  who  had  learned  the  trade  of  a  silver- 
smith in  his  boyhood  at  Quebec  and  who  later  became  an  Indian 
trader  at  Sandusky  and  Maumee  and  Saint  Joseph,  moved  with  his 
family  to  Chicago  in  the  spring  of  1804,  and  occupied  the  Point 
de  Sable  cabin,  which  he  bought  from  Le  Mai.  Kinzie  was  about 
forty  years  old  at  this  time,  an  energetic  man,  and  his  long  experi- 
ence with  Indians  and  wide  acquaintance  among  them  brought 
much  trade  to  his  "house."  Within  a  short  time,  it  is  said,  he 
established  branch  trading  posts  at  Milwaukee  and  on  the  Illinois, 
the  Rock  and  the  Kankakee  rivers. 

Even  before  his  removal  from  Saint  Joseph  to  Chicago,  as 
his  books  show,  he  was  conducting  trading  "adventures"  at  Peoria 
and  elsewhere.  Thomas  Forsyth,  his  half-brother  and  partner, 
managed  the  establishment  at  Peoria,  although  in  a  legal  document 
executed  in  1804  John  Kinzie  and  Thomas  Forsyth  are  described 
as  "Merchants  of  Chicago." 

Prices  of  some  well-known  commodities  in  Chicago  at  an 
early  day  are  interesting.  The  following  are  from  Kinzie's  account 
books :  Corn,  $1.50  to  $2.50  per  bushel ;  tobacco,  SO  cents  per  pound ; 
whisky,  $1.25  per  gallon;  flour,    10  cents  per  pound;  raisins,  50 


56  HISTORY  OF  THE  BOARD  OF  TRADE 

cents  per  pound;  tea,  $2.50  per  pound;  powder,  $1.50  per  pound; 
butter,  50  cents  per  pound ;  shot,  33  cents  per  pound. 

In  addition  to  his  trading  operations  at  Chicago  and  elsewhere 
Kinzie's  books  show  that  he  frequently  contracted  for  the  trans- 
portation of  goods  across  the  Chicago  portage,  his  charge  for  carry- 
ing a  "pack"  of  furs  from  "Mount  Joliet"  to  Chicago  being,  accord- 
ing to  an  entry  made  in  1808,  two  dollars.  The  wages  of  a  common 
laborer  at  this  time  appear  to  have  been  about  fifty  cents  per  day. 

Indentured  Servants 

The  most  remarkable  entry  in  Kinzie's  books,  however,  is 
under  date  of  April  25,  1809: 

"Francis  Bourbonnais,  Dr. 
To  one  negro  wench,  sold  him  by  Indenture,  £160." 

This  transaction  and  another,  which  will  be  described  pres- 
ently, show  that  a  method  had  been  devised  to  evade  the  provision 
of  the  Ordinance  of  1787,  which  prohibited  slavery  in  the  Northwest 
territory,  "otherwise  than  in  the  punishment  of  crimes,  whereof  the 
party  shall  have  been  duly  convicted." 

But  this  ordinance  also  guaranteed  to  "the  French  and  Cana- 
dian inhabitants  and  other  settlers  of  the  Kaskaskias,  St.  Vincents 
and  the  neighboring  villages  who  have  heretofore  professed  them- 
selves citizens  of  Virginia,"  the  retention  of  "their  laws  and  cus- 
toms now  in  force  among  them,  relative  to  the  descent  and  con- 
veyance of  property."  One  of  "the  laws  and  customs"  was  the 
right  to  hold  slaves,  which  were  introduced  into  the  Illinois  coun- 
try by  the  French  in  1720.  Neither  the  English  government,  to 
whom  the  control  of  affairs  passed  by  the  Treaty  of  Paris  in  1763, 
nor  the  state  of  Virginia,  which  succeeded  English  sovereignty  by 
virtue  of  Colonel  George  Roger  Clark's  conquest  in  1778,  laid  any 
restrictions  upon  the  holding  of  slaves  by  the  settlers  of  this  region. 
(Harris,  p.  5.)  General  St.  Clair,  the  first  governor  of  the  North- 
west Territory,  interpreted  Article  Six  of  the  Ordinance  "as  intended 
only  to  prevent  the  introduction  of  slaves,  and  not  as  aiming  at  the 
emancipation  of  those  already  there,"  and  soon  this  view  was 
universally  accepted.  As  early  as  "1803  it  was  found  necessary  to 
provide  some  legal  status  for  the  numerous  indentured  blacks,  and 
the  Governing  Council  of  Indiana  Territory,  to  which  all  Illinois 
and  Wisconsin  and  the  northern  peninsula  of  Michigan  belonged, 
drew  up  a  code  legalizing  the  system  of  indentures  which  already 
existed.  The  long  term  of  indenture  permitted  by  this  code  reduced 
the  indentured  servant  to  a  condition  little  removed  from  slavery, 
and  some  of  the  French  at  Cahokia  continued  to  claim  as  slaves 
the  descendants  of  those  who  had  been  in  servitude,  until  in  1844 
the   Supreme   Court  of  the   State   of   Illinois   declared   that   "the 

\ 


OF  THE  CITY  OF  CHICAGO  57 

descendants  of  the  slaves  of  the  old  French  settlers,  born  since 
the  Ordinance  of  1787,  and  before  or  since  the  adoption  of  the 
Constitution  of  Illinois  cannot  be  held  in  slavery  in  this  state,"  and 
thus  finally  freed  Illinois  from  the  blight  of  slavery,  in  fact  as  well 
as  in  name. 

In  1804  Chicago  was  located  in  Wayne  County,  Indiana  Terri- 
tory, whose  county  seat  was  Detroit.  In  May  of  that  year  a  "Negro 
man,"  named  Jeffrey  Nash,  signed,  by  making  his  mark,  articles 
of  indenture,  whereby  in  return  for  "meat,  drink,  apparel,  washing 
and  lodging,  fitting  for  a  servant,"  he  bound  himself  for  seven 
years  to  serve  John  Kinzie  and  Thomas  Forsyth,  "Merchants  of 
Chicago."  By  this  indenture  Nash  agreed,  among  other  things, 
that  for  the  space  of  seven  years,  himself  "the  said  servant  his 
said  Masters  shall  faithfully  serve,  their  secrets  keep,  their  lawful 
command  everywhere  gladly  obey.  He  shall  do  no  damage  to  his 
said  Masters.  He  shall  not  waste  his  Masters  goods  nor  lend  them 
unlawfully  to  others.  He  shall  not  commit  Fornication  nor  con- 
tract Matrimony  within  said  Term.  At  dice  Cards  or  any  unlawful 
game  he  shall  not  play  whereby  his  said  Masters  may  be  damaged 
with  his  own  goods  or  the  goods  of  others  during  the  said  Term 
without  license  of  his  said  Masters  he  shall  neither  buy  nor  sell 
he  shall  not  absent  day  nor  night  from  his  said  Masters  Service 
without  their  leave  nor  haunt  Taverns  or  any  place  or  places  with- 
out permission  from  said  Masters  but  in  all  things  behave  as  a 
faithful  Servant  ought  to  do  during  the  said  Term." 

Forsyth  took  him  to  Peoria  and  held  him  there  as  a  slave  for 
several  years.  At  last  he  escaped  from  bondage  and  found  his 
way  to  New  Orleans.  Forsyth  and  Kinzie  brought  suit  in  New 
Orleans  to  recover  possession  of  Nash,  contending  that  he  was 
their  lawful  slave,  and  witnesses  from  Peoria  testified  that  he  was 
known  there  as  such.  Kinzie  and  Forsyth  also  produced  what 
purported  to  be  a  Bill  of  Sale  of  Nash  to  them,  executed  a  few 
months  prior  to  the  time  he  became  their  indentured  servant.  The 
case  went  to  the  Supreme  Court  of  Louisiana,  which  decided  in 
favor  of  Nash,  and  he  was  set  at  liberty. 

The  fur  trade  was  profitable  and  Kinzie  prospered.  His  wife 
was  an  agreeable  woman,  whose  first  husband  was  a  Detroit  militia 
officer  in  the  British  Indian  Service,  named  McKillip.  He  was 
killed  during  Wayne's  campaign  on  the  Maumee,  leaving  a  daugh- 
ter, Margaret,  who  accompanied  her  mother  to  Chicago  and  later 
married  Lieutenant  Helm,  a  young  officer,  of  whom  more  will  be 
heard  in  due  time.  There  is  a  romantic  story  of  Kinzie's  previous 
matrimonial  relation  with  Margaret  McKenzie,  who  had  been  a 
captive  among  the  Indians  for  many  years,  which  those  who  are 
interested  can  find  in  Andreas'  "History  of  Chicago,"  Blanchard's 
"The  Northwest  and  Chicago,"  and  elsewhere.  Whether  or  not 
this  union  had  legal  or  ecclesiastical  sanction  is  a  question  which 


58  HISTORY  OF  THE  BOARD  OF  TRADE 

was  debated  for  years  with  some  warmth  by  members  of  Kinzie's 
later  family  on  the  one  side  and  the  descendants  of  the  children 
borne  to  him  by  Margaret  McKenzie  on  the  other.  Two  of  her 
three  children  by  Kinzie  came  to  Chicago. 

Perhaps  the  truth  about  these  matrimonial  complications  will 
never  be  known,  and  at  all  events,  public  opinion  on  the  frontier 
always  has  been  tolerant  in  cases  of  this  kind,  and  if  formal  cere- 
mony were  lacking,  the  parties  could  plead  the  authority  of  custom. 

Kinzie's  hospitable  fireside  on  the  north  side  of  the  river 
opposite  the  fort,  and  on  the  site  now  occupied  by  Kirk's  Soap 
Factory,  near  the  corner  of  Kinzie  and  Pine  Streets,  soon  became 
the  center  of  such  social  life  as  there  was  in  the  isolated  settlement 
about  the  fort.  At  first  Chicago  "society,"  or  at  least  the  feminine 
contingent,  must  have  consisted  of  the  wives  of  the  two  Whistlers, 
Miss  Sarah  Whistler  and  Mrs.  John  Kinzie,  wife  of  the  trader. 
The  first  society  event  was  the  marriage,  on  the  first  of  November, 
1804,  of  Miss  Sarah  Whistler  to  Mr.  James  Abbott,  a  Detroit 
merchant,  and  the  ceremony  was  performed  by  Mr.  Kinzie.  Ellen 
Marion  Kinzie  was  born  in  December,  1805,  and  it  might  be  in 
order  to  call  her  arrival  a  "society  event." 

In  the  following  year  the  United  States  Government  estab- 
lished a  "factory"  at  Chicago,  this  being  in  reality  a  government 
shop  intended  to  enable  the  Indians  to  exchange  their  furs  for  such 
goods  as  they  should  need  upon  terms  which  would  afford  little 
or  no  profit  to  the  "factory,"  and  force  the  traders  to  be  satisfied 
with  smaller  profits,  or  to  abandon  their  business.  Of  course,  there 
was  vigorous  opposition  to  the  "factory"  system  on  the  part  of 
the  traders,  because  the  "factory"  could  give  the  Indians  more 
favorable  terms  of  exchange  for  their  furs  than  the  traders  would 
give  them,  and  the  latter  could  hold  a  considerable  portion  of  the 
trade  only  by  extending  credit  to  their  customers  and  by  selling 
them  liquor  which  the  "factors"  were  prohibited  to  do.  The  patron- 
age of  the  soldiers,  small  as  it  must  have  been,  was  sought  by 
Kinzie,  who  in  1807  made  a  partnership  with  John  Whistler,  Jr., 
a  young  son  of  the  post  commander,  for  the  purpose  of  supplying 
the  garrison  trade.  This,  in  turn,  met  with  the  opposition  of 
Matthew  Irwin,  who  was  the  Government  factor,  and  who  seems 
to  have  been  Government  contractor  for  such  provisions  as  were 
furnished  by  the  Government  to  the  soldiers.  The  partnership 
between  Kinzie  and  young  Whistler  was  dissolved  in  1809,  evidently 
with  more  or  less  ill  feeling  on  both  sides,  and  the  feud  to  which 
reference  has  already  been  made  soon  developed,  with  Kinzie, 
Irwin,  Jouett,  the  Government  Indian  agent,  and  Lieutenant 
Thompson  on  one  side,  and  Captain  Whistler,  Lieutenant  Hamil- 
ton, who  was  his  son-in-law,  and  Dr.  John  Cooper,  surgeon  of  the 
post,  on  the  other.  Every  man  of  any  importance  in  the  community 
was  arrayed  on  one  side  or  the  other  of  this  quarrel,  which  became 


OF  THE  CITY  OF  CHICAGO  59 

more  personal  because  of  the  small  numbers  involved,  and  because 
of  their  isolation  from  all  the  world  outside. 

Under  these  circumstances,  and  remembering  the  social  attrac- 
tion of  a  well-ordered  home  like  the  Kinzies,  presided  over  by  a 
charming  matron,  it  is  not  surprised  that  one  young  officer  after 
another  should  have  espoused  the  Kinzie  side  of  the  dispute 
and  been  led  into  words  and  acts  subversive  of  all  military  dis- 
cipline. 

It  would  be  a  grateful  task  for  the  historian  to  record,  if  that 
were  possible,  that  the  transfer  of  Captain  Whistler  and  Lieutenant 
Hamilton  and  the  death  of  Lieutenant  Thompson,  which  occurred 
in  March  of  the  following  year,  together  with  the  assignment  of  a 
corps  of  new  officers  to  Fort  Dearborn,  restored  harmony  in  the 
settlement,  and  discipline  in  the  garrison.  But,  whatever  the  early 
relations  of  the  Kinzies  to  the  new  commander  of  the  post  may 
have  been,  their  attitude  toward  him  at  the  supreme  crisis,  which 
arrived  a  little  more  than  two  years  after  he  assumed  command, 
their  persistent  attempts  to  discredit  him  and  his  conduct  at  the 
time  of  the  massacre  and  to  exalt  the  conduct  of  his  subordinates. 
Helm  and  Ronan,  indicate  that  the  Kinzie  influence,  for  some 
reason  or  other,  was  prejudicial  to  the  loyalty  which  every  soldier 
owes  to  his  superior  officer. 

Captain  Heald  in  Command 

In  April,  1810,  Captain  Nathan  Heald,  who  had  been  in  com- 
mand at  Fort  Wayne,  was  ordered  to  take  command  at  Fort  Dear- 
born. He  was  not  pleased  with  his  new  post,  and  in  the  autumn 
of  that  year  asked  for  leave  of  absence  and  spent  the  winter  in 
Massachusetts.  He  returned  to  Chicago  by  way  of  Pittsburgh 
and  Louisville,  and  at  the  latter  place,  on  May  23rd,  1811,  he 
married  Rebekah  Wells,  daughter  of  Colonel  Samuel  Wells  and 
niece  of  Captain  William  Wells.  He  reached  Chicago,  accompanied 
by  his  bride,  in  the  following  month,  after  a  journey  on  horseback 
through  the  Indiana  wilderness.  About  the  time  Captain  Heald 
returned  to  Fort  Dearborn  with  his  bride,  Lieutenant  Linai  T.  Helm 
was  transferred  at  his  own  request  from  Detroit  to  Chicago  to  fill 
the  place  of  Lieutenant  Thompson,  one  of  the  young  officers  who 
was  involved  in  the  quarrel  of  the  preceding  year,  and  who  died 
on  the  4th  of  March,  1811.  In  the  same  month  of  March,  1811, 
George  Ronan,  a  young  West  Point  cadet,  was  ordered  to  proceed 
to  Fort  Dearborn  at  once  and  given  the  rank  of  ensign,  and  he 
must  have  reached  his  post  about  the  time  Captain  Heald  and 
Lieutenant  Helm  arrived. 

There  were  some  additions  to  the  little  settlement  during  the 
eight  years  following  the  completion  of  the  fort.  A  man  named 
Burns  had  a  cabin  on  the  north  side  of  the  river  west  of  the  Kinzie 
house,  and  Charles  Lee,  who  had  a  farm  on  the  left  bank  of  the 


60  HISTORY  OF  THE  BOARD  OF  TRADE 

south  branch  of  the  river,  about  where  Center  Avenue  now  inter- 
sects West  Twenty-second  Street,  also  built  a  dwelling  house 
for  himself  and  family,  just  south  of  the  fort.  The  Agency  House 
was  west  of  the  fort  and  was  built  in  1805  by  Charles  Jouett,  the 
first  Indian  agent. 

The  unpreparedness  of  the  United  States,  for  which  it  has 
paid  so  dearly  in  the  early  part  of  all  its  wars,  was  conspicuous 
in  1812.  The  unreasonable  prejudice  of  many  Americans  against 
a  standing  army  and  Thomas  Jeflferson's  absurd  notions  about 
military  and  naval  affairs,  had  prevented  the  maintenance  of  an 
armed  force  commensurate  with  the  needs  of  the  growing  nation, 
and  nothwithstanding  an  increase  in  the  army  authorized  by  Con- 
gress in  the  early  part  of  the  year  1812,  the  Secretary  of  War 
reported  on  the  12th  of  June  in  that  year  a  total  of  6,744  men  in 
the  regular  establishment. 

The  British  regular  force  in  Canada  at  this  time  was  very 
small,  probably  about  1,500,  but  there  was  a  considerable  body  of 
Canadian  militia,  and  the  British  had  on  American  soil  a  very  large 
number  of  Indian  allies,  who  had  been  kept  under  pay  for  years 
by  the  distribution  of  "presents"  at  Maiden,  and  who  constituted  a 
body  of  light  troops  unsurpassed  for  warfare  in  the  forests  which 
then  covered  the  frontier.  The  disparity  of  naval  force  was  very 
great. 

"At  the  outbreak  of  the  war  (of  1812)  there  were  eighteen 
vessels  in  the  navy  of  the  United  States,  ranging  from  44-gun 
frigates  to  12-gun  brigs.  There  were  also  176  gunboats,  on  which 
a  large  sum  of  money  had  been  expended,  but  which  were  of  no 
use  whatever.  The  annual  abstracts  of  the  British  navy  show 
that  it  possessed  at  this  time  230  ships  of  the  line  of  from  60  to  120 
guns  each  and  600  frigates  and  smaller  vessels.  From  the  English 
standpoint,  no  vessel  of  the  American  fleet  was  large  enough  to 
take  her  place  in  the  line  of  battle  or  was  regarded  as  being  really 
a  combatant."     (Winsor,  vol.  7,  p.  Z77 ^ 

As  might  have  been  predicted,  the  British  and  their  Indian 
allies  were  the  first  to  strike.  On  the  16th  of  July,  1812,  two  hun- 
dred and  twenty-five  troops  and  four  hundred  Indians  captured 
the  fort  on  the  island  of  Mackinac,  with  its  garrison  of  sixty- 
one  officers  and  men,  whose  first  intimation  of  existence  of 
war  was  conveyed  by  the  British  commander's  summons  to 
surrender. 

In  the  early  part  of  1812  Governor  William  Hull  of  the  Ter- 
ritory of  Michigan,  an  officer  who  served  with  credit  in  the  Revo- 
lutionary War,  accepted  with  reluctance  a  commission  as  briga- 
dier general  in  the  United  States  army,  with  the  understanding 
that  he  was  to  continue  to  perform  his  civil  duties  as  usual.  He 
was  conscious  of  the  difficulties  which  were  certain  to  be  encoun- 
tered in  the  defense  of  Detroit  and  the  other  posts  on  the  Great 


OF  THE  CITY  OF  CHICAGO  61 

Lakes  and  had  for  years  repeatedly  urged  upon  the  government 
the  expediency  of  building  enough  armed  vessels  to  maintain  con- 
trol. In  his  memorial  of  June  15th,  1811,  he  says,  "Prepare  a 
naval  force  on  Lake  Erie  superior  to  the  British  and  sufficient  to 
preserve  your  communication." 

This  had  not  been  done,  but  Hull  was  given  a  force  of  about 
fifteen  hundred  men,  only  one-fifth  of  whom  were  regular  troops, 
and  directed  to  accomplish  the  impossible  task,  not  only  of  defend- 
ing Detroit,  but  of  conquering  Upper  Canada,  while  his  long  line 
of  communications  through  the  forest  between  Detroit  and  Urbana, 
Ohio,  his  nearest  base  of  supplies,  was  in  constant  peril  from 
incursions  of  the  enemy,  which  their  control  of  navigation  on 
Lake  Erie  rendered  easy  and  inevitable. 

After  cutting  a  road  through  200  miles  of  forest,  Hull,  with 
the  advance  guard  of  his  army,  reached  Spring  Wells,  just  below 
Detroit,  on  the  5th  of  July,  1812,  having  received  news  three  days 
before  that  war  had  been  declared  against  Great  Britain  on  the 
18th  of  June.  On  that  day  "Secretary  of  War  Eustis  wrote  two 
letters  to  General  Hull.  In  one  of  these  no  mention  was  made  of 
this  important  event ;  in  the  other  it  was  distinctly  and  officially 
announced.  The  former  of  the  two  was  carefully  made  up  and 
expedited  by  a  special  messenger,  who  arrived  in  the  general's 
camp  on  the  24th  of  June,  while  the  latter  was  committed  to  the 
public  mail  as  far  as  Cleveland,  and  thence,  through  a  wilderness 
of  one  hundred  miles,  to  such  conveyance  as  accident  might  sup- 
ply!" (Armstrong,  vol.  I,  pp.  47-48).  "The  result  was  that  the 
declaration  did  not  reach  its  destination  until  the  2d  of  July,  two 
days  after  the  information  had  been  received  by  the  enemy  at 
Maiden."    (Ibid.  48.) 

Encouraged  by  the  Secretary  of  War  and  urged  by  the  impa- 
tience of  the  officers  and  men  of  his  command,  Hull  crossed  the 
Detroit  River  on  the  12th  of  July,  threatening  the  British  fort  at 
Maiden,  and  sent  out  foragers  to  collect  provisions  for  his  troops. 

As  we  have  seen,  Fort  Mackinaw  fell  on  the  16th  of  July  and 
Hull  was  apprised  of  this  disaster  on  the  29th.  About  this  time 
he  intercepted  a  letter  from  a  member  of  the  Northwest  Company 
at  Fort  William  on  Lake  Superior,  giving  an  account  of  the  mus- 
tering of  thousands  of  Indians  and  many  hundred  traders,  who 
were  preparing  to  join  the  British  force  at  Maiden. 

Colonel  Proctor,  the  British  commander,  arrived  at  Maiden 
with  reinforcements  about  this  time ;  all  hope  of  assistance  in  the 
invasion  of  Canada  from  the  troops  at  Niagara  was  dispelled  by 
news  of  the  one-sided  armistice  which  General  Dearborn  had  con- 
cluded with  Sir  George  Prevost,  leaving  the  latter  free  to  send  all 
his  troops  to  oppose  General  Hull,  while  binding  the  Americans 
to  inaction.  Hull  was  also  informed  by  General  Hall  and  General 
Porter,   commanding  at   Niagara  and   Black   Rock,   that   "a   large 


62  HISTORY  OF  THE  BOARD  OF  TRADE 

number  of  boats  filled  with  British  troops  had  passed  over  Lake 
Ontario  on  their  way  to  Maiden,  and  that  they  could  promise  no 
assistance  from  that  quarter."  But,  worst  of  all,  on  the  5th  of 
August,  a  detachment  of  two  hundred  men  under  Major  Van 
Home,  who  had  been  sent  to  the  River  Raisin  to  escort  a  quantity 
of  provisions  and  other  supplies,  collected  in  Ohio  by  Governor 
Meigs,  was  roughly  handled  by  a  force  of  British  and  Indians  at 
Brownstown  at  the  mouth  of  the  Huron  River,  and  the  brflliant 
success  of  Lieutenant-Colonel  Miller  at  Maguaga  four  days  later 
did  not  enable  the  officer  to  reach  Captain  Brush  at  the  River 
Raisin  or  obtain  his  needed  supplies.  ^ 

The  campaign  was  now  hopelessly  lost.  Lack  of  military 
preparation,  absence  of  all  attempt  at  naval  readiness,  an  ineffi- 
cient commander  on  the  New  York  border,  absolute  inability 
on  the  part  of  the  authorities  at  Washington  to  comprehend  the 
magnitude  of  the  task  they  had  imposed  upon  General  Hull,  and 
to  push  forward  necessary  reinforcements,  criminal  carelessness 
in  neglecting  to  advise  him  promptly  of  the  declaration  of  war, 
had  almost  doomed  his  expedition  to  failure  before  it  reached 
Detroit.  Perhaps  a  Sheridan  or  a  Stonewall  Jackson,  by  an  imme- 
diate assault  upon  Fort  Maiden,  might  have  captured  that  strong- 
hold with  the  undisciplined,  inexperienced  and  somewhat  insub- 
ordinate militia  who  composed  four-fiifths  of  General  Hull's  army, 
and  without  the  artillery  which  he  considered  indispensable.  But 
with  the  enemy  in  command  of  the  lake ;  with  the  road  to  the  east 
open  to  the  unlimited  resources  of  Great  Britain,  and  the  forests 
from  Niagara  to  the  Mississippi  River  swarming  with  hostile 
Indians,  it  could  hardly  have  been  held  permanently.  The  ease 
with  which  Upper  Canada  was  overrun  in  the  following  year,  after 
Commodore  Perry's  victory  on  Lake  Erie,  emphasizes  the  sound- 
ness of  General  Hull's  admonition  as  to  the  vital  nature  of  naval 
superiority  on  the  Lakes. 

Having  decided  against  the  only  line  of  operations  which 
offered  a  possibility  of  even  temporary  success  and  having  per- 
mitted the  opportunity  to  pass,  General  Hull,  with  his  communi- 
cations interrupted,  wisely  determined  to  abandon  his  Canadian 
campaign  and  return  to  Detroit,  which  he  did  on  he  8th  of  August. 
On  the  following  day,  as  already  related,  Lieutenant-Colonel  Miller 
defeated  an  attack  in  which  most  of  the  British  garrison  of  Maiden 
and  Tecumseh's  Indians  participated,  and  which  failed  of  decisive 
results  only  because  command  of  the  lake  enabled  the  enemy  to 
escape  in  boats.  Why  General  Hull,  with  the  clear  military  vision 
he  had  shown  hitherto,  did  not  realize  and  at  once  act  upon  the 
patent  fact  that  his  paramount  necessity  was  the  maintenance  of 
his  "cracker  line,"  extending  200  miles  through  a  wilderness,  "and 
in  a  great  part  of  its  length  skirted  by  the  lake  commanded  by 
British  ships"  (Armstrong,  vol.  I,  p.  49),  with  a  British  fortress 


OF  THE  CITY  OF  CHICAGO  63 

and  garrison  just  across  the  Detroit  River,  twenty  miles  below 
the  city,  is  no  more  astonishing  than  his  neglect  to  notify  the  com- 
manding officers  at  Fort  Mackinac  and  Fort  Dearborn  of  the  decla- 
ration of  war  as  soon  as  he  himself  was  informed  of  it.  There 
is  nothing  to  show  that  he  ever  notified  Captain  Hanks  at  Fort 
Mackinac,  and  as  Captain  Heald  at  Fort  Dearborn  did  not  receive 
information  of  the  existence  of  war  until  August  9th,  it  is  probable 
that  Kjeneral  Hull  overlooked  this  garrison  also  for  about  four 
weeks.  If  General  Hull,  on  the  2d  of  July,  upon  receipt  of  the 
news,  had  instructed  Captain  Heald  to  abandon  Fort  Dearborn  and 
proceed  to  Fort  Wdyne,  there  is  little  doubt  that  the  garrison  and 
the  women  and  children  could  have  reached  that  post  in  safety. 
The  result  of  General  Hull's  neglect,  as  far  as  it  relates  to  the 
fortunes  of  Chicago,  will  be  told  in  the  next  chapter  by  Colonel 
H.  O.  S.  Heistand  of  the  United  States  army.  For  more  than  a 
hundred  years  civilians  of  all  sorts  and  of  both  sexes  have  passed 
judgment  upon  the  principal  actors  in  the  tragedy  at  Chicago,  and 
without  the  knowledge  of  facts  which  have  been  brought  to  light 
in  recent  years.  The  opinion  of  an  educated  soldier  who  has  writ- 
ten with  these  facts  in  view  and  without  personal  bias  will  be 
found  instructive  and  valuable. 

The  Tragedy  of  August  15, 1812.  By  Col.  H.  O.  S.  Heistand 

General  Harrison's  victory  over  the  Indians  at  Tippecanoe  in 
November,  1811,  was  less  decisive  than  his  political  followers  rep- 
resented it  some  thirty  years  later.  An  inferior  force  of  savages 
attacking  at  night  had  been  handsomely  repulsed,  and,  with  the 
coming  of  daylight,  driven  off.  But  the  losses  in  the  battle  prob- 
ably were  about  equal,  and  the  American  general,  encumbered 
with  wounded  men  and  having  won  a  tactical  victory,  deemed  it 
prudent  to  fall  back  to  Vincennes.  A  crushing  defeat,  such  as 
Wayne  administered  to  them  at  Fallen  Timbers  seventeen  years 
before,  might  have  deterred  the  Indians  from  joining  the  British 
in  1812.  The  indecisive  battle  at  Tippecanoe  only  exasperated 
them,  and  enabled  Tecumseh  upon  his  return  to  enlist  all  the 
Northwestern  Indians  on  the  side  of  the  British. 

The  British  officials  in  Canada,  aware  that  their  savage  allies 
would  be  worsted  in  a  contest  with  the  Americans,  used  their 
influence  to  prevent  a  premature  outbreak  of  hostilities,  and  the 
winter  of  1811-12  passed  without  serious  incidents  at  Fort  Dear- 
born. Some  of  the  older  Pottawatomie  chiefs,  notably  Winnemeg 
and  Topenebe,  whose  bands  were  located  on  the  St.  Joseph  River, 
and  Black  Partridge,  whose  village  was  on  the  Illinois  River  near 
the  head  of  Peoria  Lake,  felt  genuine  friendship  for  the  whites; 
a  few  others,  perhaps,  were  prudent  enough  to  desire  peace  with 
them,  but  the  young  men,  the  fighting  force  of  the  tribe,  were  in 


64  HISTORY  OF  THE  BOARD  OF  TRADE 

full  sympathy  with  Main  Poc,  the  war  chief  on  he  Kankakee,  who, 
with  a  large  number  of  his  followers,  spent  the  autumn  of  1811 
and  the  winter  following  near  Maiden,  where  he  was  in  constant 
communication  with  the  British  officials  and  awaited  with  impa- 
tience the  outbreak  of  war  between  the  United  States  and  Great 
Britain.  A  tribe  as  widely  scattered  as  the  Pottawatomies  had 
many  "chiefs,"  almost  every  village  boasting  one  of  these  head- 
men. So  loose,  however,  was  social  organization  among  the  Indians 
that  the  authority  of  these  "chiefs"  was  limited,  and  the  profes- 
sions of  friendship  made  by  those  who  really  were  desirous  of 
peace  were  of  much  less  value  than  the  whites  in  and  near  Fort 
Dearborn  supposed.  Notwithstanding  the  real  friendship  of  a 
few  and  the  indifference  of  some,  it  was  well  known  that  many 
Pottawatomies  had  been  among  the  Prophet's  followers  at  the  battle 
of  Tippecanoe. 

Mrs.  Kinzie  gives  an  incident  in  "Waubun,"  which  is  charac- 
teristic of  Indian  methods  and  entirely  credible.  Two  Indians 
of  the  Calumet  band  of  Pottawatomies  came  to  Fort  Dearborn 
in  the  spring  of  1812  to  call  upon  Captain  Heald.  One  of  them. 
Nan-non-gee,  seeing  Mrs.  Heald,  and  Mrs.  Heald  playing  battledore 
on  the  parade  ground,  said  to  the  interpreter,  "The  white  chiefs' 
wives  are  amusing  themselves  very  much ;  it  will  not  be  long  before 
they  will  be  hoeing  in  our  cornfields." 

On  the  afternoon  of  April  6th,  1812,  a  party  of  soldiers  obtained 
leave  to  go  up  the  South  Branch  to  fish.  "A  man  named  Lee, 
who  lived  on  the  lake  shore,  had  enclosed  and  was  farming,  appar- 
ently in  partnership  with  one  Russell,  a  piece  of  land  on  the  north- 
west side  of  the  South  Branch  within  the  present  lumber  district, 
about  halfway  between  Halsted  Street  and  Ashland  Avenue.  It 
was  first  known  as  Lee's  Place,  afterwards  as  Hardscrabble." 
("The  Chicago  Massacre,"  by  Joseph  Kirkland,  p.  70.)  An  Ameri- 
can named  Liberty  White,  was  in  charge  of  the  farm.  With  him, 
on  the  afternoon  of  the  6th,  were  a  son  of  Mr.  Lee,  the  owner,  a 
Canadian  Frenchman,  and  a  soldier  of  the  garrison.  Late  in  the 
day  ten  or  twelve  Indians  entered  the  house  without  ceremony 
and  seated  themselves  according  to  their  custom.  The  boy  and 
the  soldier  walked  down  to  the  river  bank  and,  upon  pretense  of 
feeding  the  cattle  on  the  opposite  side  of  the  stream,  paddled 
across  in  one  of  the  canoes  which  was  lying  there,  fed  the  stock, 
and  then,  concealing  their  movements  by  the  haystacks,  reached 
the  woods  and  made  all  haste  to  the  fort.  When  they  had  run 
about  a  quarter  of  a  mile  they  heard  the  discharge  of  two  guns, 
doubtless  the  shots  which  killed  White  and  the  Frenchman.  They 
continued  to  run  towards  the  fort,  stopping  only  when  they  arrived 
on  the  river  bank  opposite  the  Burns  Cabin,  which  stood  where  is 
now  the  intersection  of  Kinzie  and  North  State  Streets.  Calling 
across  to  warn  the  Burns  family  of  danger,  they  ran  to  the  fort. 


J 


OF  THE  CITY  OF  CHICAGO  65 

The  commanding  officer  ordered  a  gun  to  be  fired  as  a  signal  of 
danger,  and  the  fishing  party  hearing  it,  put  out  their  torches  and 
dropped  down  the  river.  Stopping  at  the  Lee  Cabin  to  warn  the 
inmates,  they  discovered  in  the  darkness,  by  the  sense  of  touch, 
the  dead  body  of  one  of  the  men,  who  had  been  scalped;  and  then 
made  their  way  to  the  fort. 

As  soon  as  the  facts  became  known  panic  reigned  among  the 
white  settlers ;  the  Kinzie  family  took  refuge  in  the  fort,  where 
John  Kinzie  was  interpreter ;  the  Agency  House  on  the  river  bank 
just  west  of  the  fort,  and  commanded  by  its  guns,  was  strengthened, 
the  porches  planked  up,  loopholes  made  for  musketry,  the  civilians 
were  organized  as  a  company  of  militia,  and  they  with  their  fam- 
ilies occupied  this  outpost.  From  this  time  forward  Fort  Dearborn 
was  practically  besieged  by  hostile  Indians.  They  prowled  about 
the  camp  at  night,  tried  to  steal  the  horses  from  the  garrison  stables, 
and,  failing  in  this  attempt,  cut  the  throats  of  a  flock  of  sheep, 
which  were  intended  to  supply  the  troops  with  food.  In  a  letter 
written  on  the  15th,  nine  days  after  the  murders  at  the  Lee  Cabin, 
Captain  Heald  says,  "Since  the  murder  of  these  two  men,  one  or 
two  other  parties  of  Indians  have  been  lurking  about  us,  but  we 
have  been  so  much  on  our  guard  they  have  not  been  able  to  get 
any  scalps." 

It  was  believed  that  the  murderers  of  White  and  his  com- 
panion were  Winnebagoes,  but  Captain  Heald  was  unable  to  learn 
from  the  neighboring  Pottawatomies  whether  this  supposition  was 
or  was  not  correct,  and  he,  therefore,  forbade  their  coming  to  the 
fort  until  the  identity  of  the  tribe  to  which  the  scoundrels  belonged 
should  be  established. 

Springtime  passed  and  the  summer  of  1812  wore  away,  hostile 
feeling  among  the  Indians  increasing,  the  garrison  wary  and  sus- 
picious. As  already  stated,  Congress  declared  war  against  Great 
Britain  on  the  18th  of  June  and  Mackinaw  Island  and  fort  were 
surrounded  July  16.  General  Hull  received  news  of  this  disaster 
July  29th,  and  the  same  day  wrote  to  the  Secretary  of  War  (Dren- 
nan  papers,  Hull  to  Eustis,  July  29,  1812)  that  he  should  send 
immediately  "an  express  to  Fort  Dearborn  with  orders  to  evacuate 
that  post  and  retreat  to  this  place  (Detroit)  or  Fort  Wayne,  pro- 
vided it  can  be  effected  with  a  greater  prospect  of  safety  than 
to  remain."  He  adds,  "Captain  Heald  is  a  judicious  officer,  and  I 
shall  confide  much  to  his  discretion." 

General  Hull  did  write  to  Captain  Heald  the  same  day,  but 
unfortunately  his  order  for  evacuation  of  the  post  was  mandatory, 
and  the  only  thing  left  to  Heald's  discretion  was  the  distribution 
of  the  factory  stores,  after  the  surplus  arms  and  ammunition  should 
have  been  destroyed.  The  Indian  runner,  Winnemac  (or  Win- 
nemeg)  spent  eleven  days  on  the  trail  from  Detroit,  and  General 
Hull's  order  was   not  delivered  to    Captain   Heald   until   Sunday, 


66  HISTORY  OF  THE  BOARD  OF  TRADE 

the  9th  of  August.    The  order  was  in  the  form  of  a  letter  and  read 
as  follows : 

"Sandwich,  July  29,  1812. 
"Captain  Nat.  Heald. 

"Sir:  It  is  with  regret  I  order  the  evacuation  of  your  post, 
owing  to  the  want  of  provisions  *  *  *  only  a  neglect  of  the 
commandant  of  Detroit. 

"You  will,  therefore,  destroy  all  arms  and  ammunition,  but 
the  goods  of  the  factory  you  may  give  to  the  friendly  Indians  who 
may  be  desirous  of  escorting  you  on  to  Fort  Wayne  and  to  the 
poor  needy  of  your  post. 

"I  am  informed  this  day  that  Mackinac  and  the  Island  of  St. 
Joseph  will  be  evacuated  on  account  of  the  scarcity  of  provision, 
and  I  hope  in  my  next  to  give  you  an  account  of  the  surrender 
of  the  British  at  Maiden,  as  I  expect  600  men  here  by  the  beginning 
of  September. 

"I  am,  sir,  yours,  etc. 

"Brigadier  General  Hull." 

Addressed  Captain  Nathan  Heald,  Commander  Fort  Dearborn,  by 
Express. 

According  to  Mrs.  Kinzie's  account  in  "Waubun,"  General 
Hull's  order  was  read  to  the  troops  on  dress  parade  the  following 
day.  On  Thursday,  the  13th,  Captain  William  Wells,  the  famous 
scout,  arrived  with  about  thirty  mounted  Miami  Indians,  who 
came  in  response  to  General  Hull's  request,  to  act  as  an  escort  to 
the  garrison  on  its  march  of  about  150  miles  to  Fort  Wayne,  which 
was  the  nearest  fortified  post.  On  the  same  day  probably,  although 
Captain  Heald's  report  does  not  mention  it,  a  council  was  held 
with  the  Indians,  who  had  by  this  time  assembled  in  great  num- 
bers, at  which  Captain  Heald  announced  his  intention  to  distribute 
the  goods  of  the  government  factory  among  them  and  to  evacuate 
the  fort,  the  Indians  agreeing  to  permit  the  garrison  to  retire  with- 
out molestation,  and,  it  would  seem,  tpromising  more  or  less 
definitely,  their  friendly  escort  on  the  march. 

Doubtless  Captain  Wells  was  present  at  this  council,  but  such 
negotiations  as  there  were  must  of  necessity  have  been  carried 
on  by  Captain  Heald,  the  post  commander  on  one  side,  and  the 
leading  Pottawatomie  chiefs  on  the  other.  As  the  uncle  of  Mrs. 
Heald,  Captain  Wells  had  a  personal  interest  in  extricating  the 
garrison  from  its  perilous  situation,  in  addition  to  his  military  duty 
as  leader  of  the  friendly  Miami  Indians. 

On  Friday,  the  14th,  or  possibly  in  the  preceding  night,  in 
obedience  to  the  order  of  General  Hull,  the  surplus  arms  and  ammu- 
nition were  destroyed,  and  Captain  Heald,  exercising  the  discretion 
given  him  in  General  Hull's  order,  and  in  accordance  with  his 
own  promise  to  the  Indians  at  the  council  on  the  preceding  day, 
distributed  to  them  all  the  goods  belonging  to  the  government 
factory,  together  with  the  surplus  provisions  of  the  garrison.    All 


OF  THE  CITY  OF  CHICAGO  67 

the  liquor  on  hand  was  destroyed  some  time  between  the  9th  and 
14th,  after  the  Indians  "began  to  collect,"  according  to  Captain 
Heald's  report.  This  report  itself,  written  a  little  more  than  two 
months  after  the  tragedy  and  immediately  upon  Heald's  arrival  in 
Pittsburgh,  although  exceedingly  brief,  is  by  far  the  most  trust- 
worthy record  of  events  on  the  fatal  15th  of  August,  1812,  and 
during  the  six  preceding  days.  The  following  is  taken  from  the 
Drennan  Papers,  copied  from  Brannan's  Official  Military  and  Naval 
Letters  (Washington,  1823)  84  (Quaife  406). 

"Pittsburgh,  October  23d,  1812. 

"Sir:  I  embrace  this  opportunity  to  render  you  an  account 
of  the  garrison  of  Chicago. 

"On  the  9th  of  August  last  I  received  orders  from  General 
Hull  to  evacuate  the  post  and  proceed  with  my  command  to  Detroit 
by  land,  leaving  it  at  my  discretion  to  dispose  of  the  public  prop- 
erty as  I  thought  proper.  The  neighboring  Indians  got  the  in- 
formation as  early  as  I  did,  and  came  in  from  all  quarters  in  order 
to  receive  the  goods  in  the  factory  store,  which,  they  understood, 
were  to  be  given  them.  On  the  13th  Captain  Wells  of  Fort  Wayne 
arrived  with  about  30  Miamis  for  the  purpose  of  escorting  us  in, 
by  the  request  of  General  Hull.  On  the  14th  I  delivered  the 
Indians  all  the  goods  in  the  factory  store  and  a  considerable  quan- 
tity of  provisions  which  we  could  not  take  away  with  us.  The 
surplus  arms  and  ammunition  I  thought  proper  to  destroy,  fearing 
they  would  make  bad  use  of  it  if  put  in  their  possession.  I  also 
destroyed  all  the  liquor  on  hand  after  they  began  to  collect.  The 
collection  was  unusually  large  for  that  place,  but  they  conducted 
themselves  with  the  strictest  propriety  till  after  I  left  the  fort.  On' 
the  15th  at  9  o'clock  in  the  morning  we  commenced  our  march.  A 
part  of  the  Miamis  were  detached  in  front  and  the  remainder  in 
our  rear,  as  guards,  under  the  direction  of  Captain  Wells.  The 
situation  of  the  country  rendered  it  necessary  for  us  to  take  the 
beach,  with  the  lake  on  our  left  and  a  high  sand  bank  on  our 
right,  at  about  100  yards  distance. 

"We  had  proceeded  about  a  mile  and  a  half  when  it  was  dis- 
covered that  the  Indians  were  prepared  to  attack  us  from  behind 
the  bank.  I  immediately  marched  up  with  the  company  to  xhe  top 
of  the  bank,  when  the  action  commenced.  After  firing  one  round, 
we  charged,  and  the  Indians  gave  way  in  front  and  joined  those 
on  our  flanks.  In  about  fifteen  minutes  they  got  possession  of  all 
our  horses,  provisions  and  baggage  of  every  description  and,  find- 
ing the  Miamis  did  not  assist  us,  I  drew  olif  the  few  men  I  had 
left  and  took  possession  of  a  small  elevation  in  the  open  prairie, 
out  of  shot  of  the  bank  or  any  other  cover.  The  Indians  did  not 
follow  me,  but  assembled  in  a  body  on  the  top  of  the  bank,  and 
after  some  consultations  among  themselves,  made  signs  for  me  to 
approach  them.  I  advanced  towards  them  alone,  and  was  met  by 
one  of  the  Pottawatomie  chiefs,  called  the  Black  Bird,  with  an 
interpreter.  After  shaking  hands,  he  requested  me  to  surrender, 
promising  to  spare  the  lives  of  all  the  prisoners.  On  a  few  moments' 
consideration  I  concluded  it  would  be  most  prudent  to  comply  with 


68  HISTORY  OF  THE  BOARD  OF  TRADE 

his  request,  although  I  did  not  put  entire  confidence  in  his  prom- 
ise. After  delivering  up  our  arms,  we  were  taken  back  to  their 
encampment  near  the  fort  and  distributed  among  the  different 
tribes.  The  next  morning  they  set  fire  to  the  fort  and  left  the 
place,  taking  the  prisoners  with  them.  Their  number  of  warriors 
was  between  four  hundred  and  five  hundred,  mostly  of  the  Potta- 
watomie nation,  and  their  loss,  from  the  best  information  I  could 
get,  was  about  fifteen.  Our  strength  was  fifty-four  regulars  and 
twelve  militia,  out  of  which  twenty-six  regulars  and  all  the  militia 
were  killed  in  the  action,  with  two  women  and  twelve  children. 
Ensign  George  Ronan  and  Dr.  Isaac  Van  Voorhis  of  my  company, 
with  Captain  Wells  of  Fort  Wayne  are,  to  my  great  sorrow  num- 
bered among  the  dead.  Lieutenant  Linai  T.  Helm,  with  twenty- 
five  non-commissioned  officers  and  privates,  and  eleven  women  and 
children,  were  prisoners  when  we  were  separated.  Mrs.  Heald 
and  myself  were  taken  to  the  mouth  of  the  river  St.  Joseph,  and, 
being  both  badly  wounded,  were  permitted  to  reside  with  Mr.  Bur- 
nett, an  Indian  trader.  In  a  few  days  after  our  arrival  there  the 
Indians  all  went  ofif  to  take  Fort  Wayne,  and  in  their  absence  I 
engaged  a  Frenchman  to  take  us  to  Michillimackinac  by  water, 
where  I  gave  myself  up  as  a  prisoner  of  war,  with  one  of  my 
sergeants.  The  commanding  officer.  Captain  Roberts,  offered  me 
every  assistance  in  his  power  to  render  our  situation  comfortable 
while  we  remained  there  and  to  enable  us  to  proceed  on  our 
journey.  To  him  I  gave  my  parole  of  honor  and  came  on  to  Detroit 
and  reported  myself  to  Colonel  Proctor,  who  gave  us  a  parage  to 
Buffalo.  From  that  place  I  came  by  way  of  Presque  Isle  and 
arrived  here  yesterday. 

"I  have  the  honor  to  be  yours,  etc., 

"_N.  HEALD, 
"Captain  U.  S.  Infantry. 
"Thomas  H.  Cushing,  Esq., 
"Adjutant  General." 

No  single  participant  in  a  battle  sees  all  the  incidents  which 
occur,  but  Captain  Heald  unquestionably  describes  the  events  which 
decided  the  result,  and  in  order  to  see  the  battle  clearly,  it  is  neces- 
sary only  to  fix  upon  a  map  of  modern  Chicago  the  locality  of  the 
struggle.  Leaving  the  fort  by  the  south  gate,  which  was  north 
and  west  of  the  present  corner  of  South  Water  Street  and  Michigan 
Avenue,  the  column  marched  along  the  latter,  which  was  then  the 
lake  shore  for  about  a  mile  and  a  half.  Passing  where  Eleventh 
Street  now  is,  the  shore  line  bore  slightly  to  the  east  and  the 
marchers  probably  continued  to  follow  the  beach  until  they  reached 
the  vicinity  of  the  present  Fourteenth  Street  and  Indiana  Avenue, 
or  a  spot  a  little  south  and  east  of  that  point,  when  it  was  dis- 
covered, as  Captain  Heald  reports,  that  the  Indians  had  formed 
behind  the  sand  hills  to  attack  the  marching  column,  these  sand 
hills  being  about  one  hundred  yards  distant  from  the  line  of  march, 
and,  therefore  at  Eighteenth  Street,  somewhat  west  of  the  present 
corner  of  Prairie  Avenue. 


OF  THE  CITY  OF  CHICAGO  69 

Captain  Heald  says  a  part  of  the  friendly  Miamis  were  detached 
as  an  advance  guard,  and  as  other  accounts  of  the  battle  indicate 
that  Captain  Wells,  who  was  with  this  advance  guard,  discovered 
the  ambuscade  and  rode  back  at  full  speed  to  notify  Captain  Heald 
of  his  danger,  and  as  there  can  be  no  question  that  the  massacre 
of  the  children  and  militia  occurred  in  and  about  a  grove  of  cotton- 
wood  trees,  which  then  grew  near  the  present  corner  of  Eighteenth 
Street  and  Calumet  Avenue,  it  is  to  be  presumed  that  the  principal 
force  of  hostile  Indians  was  some  distance  south  of  Eighteenth 
Street,  just  behind  the  crest  of  sand  hills,  probably  at  that  point 
between  Prairie  and  Indiana  Avenues,  the  right  of  their  line 
extending  to  the  lake  shore  somewhat  north  of  the  place  where 
Twentieth  Street  now  is.  Captain  Heald,  upon  receipt  of  Captain 
Wells'  unwelcome  news,  deployed  his  little  company  of  soldiers, 
took  possession  of  the  crest  of  the  sand  "bank,"  and  swept  south- 
ward, taking  the  Indians  in  flank  and  driving  them  before  him. 

Forsaken  by  the  Miamis,  who  fled  at  the  beginning  of  the 
action,  and  outnumbered  about  ten  to  one,  the  valor  of  the  American 
soldiers  was  in  vain.  We  may  believe  that  their  first  volley  did 
good  execution,  but  the  Indians,  unable  to  withstand  their  bayonet 
charge,  gave  way  in  front  only  to  form  again  on  the  right  and 
left  and  rear  of  the  devoted  little  band  whose  number  was  now 
reduced  one-half.  Captain  Heald's  brave  but  useless  charge  had 
carried  the  remnant  who  survived  away  from  the  wagon-train  in 
which  were  the  precious  ammunition  and  supplies  of  various  kinds, 
the  sick  and  the  children  too  young  to  walk,  guarded  only  by  the 
twelve  militia  under  command,  probably,  of  Ensign  Ronan  and 
accompanied  by  the  women,  nine  in  number. 

The  rear  guard  of  Miamis  doubtless  left  when  the  firing  began 
and  Captain  Heald's  report  that  in  about  fifteen  minutes  the  Indians 
"got  possession  of  all  our  horses,  provisions  and  baggage"  conveys 
little  idea  of  the  awful  tragedy  which  was  being  enacted  in  the  grove 
of  cottonwoods  on  the  lake  shore  just  north  of  Eighteenth  Street. 

Reduced  as  Captain  Heald's  platoon  was,  the  Indians  had  no 
relish  for  a  fight  with  him  in  the  open,  but  they  were  quick  to 
perceive  the  opportunity  for  the  sort  of  warfare  in  which  their 
souls  delighted.  The  wagon-train  had  now  reached  the  Cottonwood 
grove  on  the  left  and  rear  of  the  soldiers,  the  interval  separating 
them  being,  according  to  Mrs.  Heald's  estimate,  200  to  300  yards, 
and  even  without  the  vivid  account  left  by  this  brave  woman  any 
one  familiar  with  Indian  tactics  can  imagine  what  happened.  Tak- 
ing advantage  of  every  tree  or  mound  of  sand,  the  savages  at  the 
front  picked  off  a  man  wherever  possible,  while  an  overwhelming 
force  swept  eastward  and  northward  over  the  ground  which  is  now 
bounded  by  Eighteenth  and  Twentieth  Streets,  Indiana  and  Calu- 
met Avenues,  killing  or  seriously  wounding  all  the  militia  who 
guarded  the  wagons,  some  of  the  women  and  most  of  the  children. 


70  HISTORY  OF  THE  BOARD  OF  TRADE 

Captain  Wells,  who  had  fought  bravely  with  the  troops  at  the  front 
after  the  desertion  of  his  Miami  Indians,  divining  the  intention  of 
the  enemy,  galloped  back  to  the  wagons  on  his  Kentucky  thorough- 
bred to  die  with  Ensign  Ronan  and  Surgeon  Van  Voorhies.  Mean- 
while, Captain  Heald,  seriously  wounded,  drew  off  his  surviving 
soldiers  to  the  open  prairie,  where  soon  afterwards  he  surrendered 
as  stated  in  his  report.  According  to  a  map  of  Chicago  in  1830 
(Andreas,  vol.  I,  opp.  p.  112)  the  surrender  was  made  at  a  point' 
just  west  of  State  Street  and  south  of  Eighteenth  Street. 

The  tragedy  was  one  of  those  sacrifices  made  by  the  army  and 
hardy  frontiersmen  in  preserving  the  integrity  of  our  territory, 
wresting  it  from  the  savage  and  transforming  the  wilderness  into 
a  productive  empire. 

Narratives  of  the  event  are  contradictory  and  subsequent  com- 
ments thereon  are  often  characterized  by  greater  effort  to  fix  blame 
than  to  credit  the  devotion  to  duty. 

Blame  for  the  catastrophe,  if  blame  there  be,  belongs  prin- 
cipally to  General  Hull,  whose  failure  to  order  the  evacuation  of 
Fort  Dearborn  until  nearly  four  weeks  after  he  received  news  of 
the  declaration  of  war  allowed  thereby  time  for  hostile  Indians 
to  assemble  in  force  in  the  vicinity  of  the  post.  In  view  of  British 
naval  superiority  on  the  lakes,  he  must  have  known  that  Fort 
Dearborn  was  untenable,  but  he  waited  until  Mackinaw  had  fallen 
and  his  own  campaign  against  Fort  Maiden  was  on  the  point  of 
failure,  and  then  sent  a  peremptory  order  to  abandon  the  post, 
giving  as  a  reason  a  "scarcity  of  provision,"  which  did  not,  in  fact, 
exist.  His  permission  to  distribute  the  factory  goods  among  "the 
friendly  Indians"  and  "the  poor  and  needy"  of  the  post,  shows 
that  he  did  not  comprehend  the  situation  at  Chicago,  while  his 
failure  to  trust  the  details  of  such  an  important  move  to  the  dis- 
cretion of  the  local  commander  greatly  increased  the  chances  of 
disaster. 

General  Hull's  order  to  evacuate  the  post  disappeared  and  for 
nearly  a  century  was  supposed  to  have  been  lost,  and  a  false  ver- 
sion, for  which  Lieutenant  Helm  was  responsible,  obtained  great 
currency  through  Mrs.  Juliette  A.  Kinzie's  romance,  "Waubun." 
According  to  Lieutenant  Helm's  version,  the  order  directed  Cap- 
tain Heald  "to  evacuate  the  post  of  Fort  Dearborn  by  the  route 
of  Detroit,  or  Fort  Wayne,  if  practicable."  ("Fort  Dearborn,"  by 
Lieutenant  Helm,  p.  15.) 

Captain  (then  Major)  Heald  died  in  1832,  and  four  years  later, 
according  to  Mrs.  Nellie  Kinzie  Gordon,  Mrs.  Kinzie  published  a 
pamphlet  giving  an  account  of  the  Chicago  massacre,  which  pur- 
ported to  be  based  upon  the  testimony  of  eyewitnesses  of  the 
tragedy.  In  1856  this  account  appeared  again  as  a  part  of 
"Waubun,"  and  for  nearly  half  a  century  Captain  Heald's  memory 
was  covered  with  obloquy  because  he  insisted  upon   obeying  the 


OF  THE  CITY  OF  CHICAGO  71 

mandatory  order  of  his  commanding  general  and  refused  to  listen 
to  the  remonstrances  of  the  Indian  trader,  Kinzie.  Heald  was  in 
his  grave,  his  widow  died  soon  after  the  publication  of  "Waubun," 
General  Hull's  order  was  lost,  and,  in  the  absence  of  other  testi- 
mony, Mrs.  Kinzie's  account  was  accepted  by  historians  and  Captain 
Heald  was  bitterly  censured  for  his  folly  in  attempting  the  march 
to  Fort  Wayne,  when,  according  to  "Waubun,"  he  was  authorized 
to  remain  at  Fort  Dearborn  if  the  march  was  impracticable.  Hurl- 
but  in  "Chicago  Antiquities,"  and  Kirkland  in  "The  Chicago  Mas- 
sacre," mildly  defend  Captain  Heald  from  the  undue  censure  which 
the  tone  of  "Waubun"  suggests  to  a  careful  reader ;  but  it  was 
only  when  General  Hull's  order  was  found  among  the  Heald  papers 
in  the  Draper  collection  at  Madison,  Wisconsin,  and  published  by 
Milo  M.  Quaife  in  "Some  Notes  on  the  Fort  Dearborn  Massacre," 
in  the  Mississippi  Valley  Historical  Association's  Proceedings  for 
1910-11,  p.  138,  that  proof  was  available  of  the  gross  injustice  done 
to  the  memory  of  a  gallant  officer. 

Fortunate  for  the  memory  of  Captain  Heald  was  the  discovery 
of  General  Hull's  order,  and  equally  unfortunate  for  the  memory 
of  Lieutenant  Helm  was  the  discovery  of  the  narrative  the  latter 
prepared  of  the  massacre  about  two  years  after  the  event  and 
transmitted  to  Judge  Woodward  of  Detroit.  This  narrative,  like 
General  Hull's  order,  was  lost  for  nearly  a  century,  but  was 
recently  found  and  has  been  published  by  Mrs.  Nellie  Kinzie 
Gordon,  a  daughter  of  the  authoress  of  "Waubun,"  under  the  title 
"The  Fort  Dearborn  Massacre,  by  Lieutenant  Helm."  Mrs.  Gordon 
says  in  her  introduction  to  Helm's  narrative,  "It  is  the  earliest 
extant  account  given  by  a  participator  in  the  fearful  tragedy  of 
August  15,  1812,"  overlooking  Captain  Heald's  official  report  made 
October  23,  1812. 

The  narrative  abounds  in  inaccurate  dates,  which  might  be 
attributed  to  poor  memory;  but  its  false  statements  and  its  tone 
of  bitter  hostility  to  Captain  Heald  cannot  be  thus  excused.  His 
misrepresentation  of  General  Hull's  order  has  been  referred  to; 
but  this  was  no  worse  than  his  invention  of  the  story  about  the 
forged  order  for  destruction  of  the  surplus  arms  and  ammunition, 
which  he  says  Kinzie  wrote  in  General  Hull's  name  and  which 
Captain  Heald  (according  to  this  story)  accepted,  knowing  it  to 
be  a  fraud.  The  discovery  of  General  Hull's  order  to  destroy  the 
surplus  arms  and  ammunition,  proved  that  Captain  Heald,  who, 
according  to  Mrs.  Gordon,  was  determined  upon  scrupulous  obe- 
dience to  General  Hull,  could  not  have  required  any  other  order 
than  the  one  he  had,  and  that  Lieutenant  Helm's  story  is  pure 
invention. 

These  two  statements,  both  of  which  Lieutenant  Helm  must 
have  known  to  be  false  (unless  his  memory  had  failed),  invalidate 
all  of  his  testimony  regarding  the  battle  and  events  preceding  it; 


72  HISTORY  OF  THE  BOARD  OF  TRADE 

and  his  purpose  in  making  them  is  disclosed  in  the  veiled  charge 
against  Captain  Heald  of  cowardice  on  the  battlefield,  which  he 
incorporates  in  his  narrative.  This  "narrative"  was  in  no  sense 
official,  but  was  sent  to  Judge  Woodward  in  1814,  some  months 
after  Helm  had  written  to  that  gentleman  to  inquire  whether  the 
writer  would  be  liable  to  court-martial  if  the  narrative  should  be 
made  public.  Mrs.  Gordon  in  her  introduction  to  the  "narrative" 
(page  5)  says,  "Judge  Woodward  evidently  advised  Lieutenant 
Helm  not  to  take  the  risk,  for  the  manuscript  was  found  many 
years  later  among  the  Judge's  papers." 

Lieutenant  Helm's  misrepresentation  of  Captain  Heald ;  the 
incidents  in  "Waubun"  given  upon  the  alleged  authority  of  "an 
eyewitness"  who  could  have  been  none  other  than  Mrs.  Helm, 
especially  the  interview  between  Ensign  Ronan  and  Captain  Heald, 
all  point  unmistakably  to  the  Kinzie  family  as  the  source  of  dis- 
affection on  the  part  of  the  junior  officers  of  the  garrison.  Whether 
the  post  commander  was  Whistler  or  Heald,  he  was  unable  to 
count  upon  the  loyalty  of  his  subordinates,  who  were  welcome 
guests  at  the  Kinzie  fireside. 

Friction  between  the  commanding  officer  of  a  frontier  garrison 
and  the  principal  Indian  trader  at  the  station  was  not  an  infre- 
quent incident.  The  army  officer  is  interested  in  preserving  peace 
with  the  savages,  which  the  sale  of  liquor  by  the  traders  often 
renders  difficult.  But  at  Chicago  in  the  latter  part  of  1811  and 
early  part  of  1812  there  were  other  reasons  why  Captain  Heald 
and  Mr.  Kinzie  could  not  be  in  perfect  accord. 

It  was  less  than  thirty  years  since  the  close  of  the  Revolutionary 
War,  in  which  Captain  Heald's  father  is  said  to  have  been  an 
officer  on  the  American  side.  Captain  Heald  himself  had  been 
in  the  regular  army  of  the  United  States  since  1799  and  had 
served  on  the  frontier  during  the  troublous  times  which  lasted 
from  the  beginning  of  Tecumseh's  conspiracy  until  the  outbreak 
of  the  War  of  1812.  By  inheritance,  by  training,  and  by  obliga- 
tion as  an  army  officer  in  command  of  a  post.  Captain  Heald 
must  have  been  thoroughly  American  in  his  views,  and  disposed 
to  look  with  little  tolerance  upon  the  constant  practices  by  which 
British  officials  incited  the  savages  to  attack  the  defenseless  women 
and  children  of  the  border. 

Mr.  Kinzie,  on  the  other  hand,  was  born  in  Quebec,  under  the 
British  flag.  His  father  was  a  surgeon  in  the  British  army,  whose 
widow,  after  his  death,  married  Mr.  William  Forsyth  of  New  York, 
then  a  British  province.  Soon  after  the  Revolution  began  Mr.  and 
Mrs.  Forsyth  moved  to  Detroit,  then  a  British  post,  taking  young 
Kinzie  with  them ;  and  according  to  Mrs.  Gordon,  when  he  was 
about  eighteen  years  old,  or  in  1781  or  1782,  that  is,  towards  the 
close  of  the  Revolutionary  War,  his  stepfather  fitted  him  out  as 
an   Indian   trader,   and   before  he  was   twenty-one   he    had    estab- 


OF  THE  CITY  OF  CHICAGO  73 

lished  successful  trading  posts  at  Sandusky  and  at  the  Maumee. 
Although  on  American  soil,  these  posts  were  under  British  aus- 
pices, and  so  continued  until  Wayne's  victory  over  the  hostile 
Indians  at  Fallen  Timbers  in  1794,  and  the  surrender  of  the  fron- 
tier posts  by  Great  Britain  in  1796  brought  Detroit  under  the 
American  flag.  In  January,  1798,  as  already  related,  Mr.  Kinzie 
married  the  widow  of  Captain  McKillip,  a  British  officer,  who  was 
"killed  in  a  sortie  from  Fort  Defiance,"  according  to  Mrs.  Gordon, 
and  who,  according  to  Quaife  (p.  147),  was  "slain  on  the  Maumee 
during  Wayne's  campaign  against  the  Northwestern  tribes." 

There  is  no  reason  to  suspect  Mr.  Kinzie  of  disloyalty  to  the 
Americans  among  whom  he  cast  his  lot  in  1804,  but  his  whole  life 
prior  to  that  time  (with  the  possible  exception  of  the  few  years, 
1798-1804,  when  he  appears  to  have  made  his  headquarters  at 
St.  Joseph)  had  been  passed  in  intimate  relations  with  the  enemies 
of  the  United  States.  During  the  years  of  increasing  hostility 
on  the  part  of  the  Indians  he  was  able  in  some  way  to  convince 
them  that  he  was  their  friend.  If  Mrs.  Gordon's  chronology  is 
correct,  Mr.  Kinzie  was  nearly  49  years  old  when  the  war  of  1812 
began,  and  Mrs.  Kinzie  more  than  40.  Both  of  them  were  too 
old  to  discard  old  prejudices  or  make  new  friends,  and,  charming 
personally  as  they  may  have  been,  there  was  enough  in  their  ante- 
cedents to  make  their  hearty  sympathy  with  the  American  cause 
improbable.  Whether  or  not  Mr.  Kinzie  was  a  British  subject  at 
the  outbreak  of  the  war,  as  General  Proctor  appears  to  have 
thought,  his  pecuniary  interest  was  opposed  to  the  evacuation  of 
the  post,  and  Captain  Heald  rightly  refused  to  listen  to  his  remon- 
strances. General  Hull's  order  was  positive ;  Captain  Heald  obeyed 
it  and  cannot  be  held  responsible  for  the  result.  One  contingency 
only  would  have  justified  Captain  Heald  in  disobeying  General 
Hull's  order  and  attempting  to  defend  the  fort.  If  the  means  at 
his  command  gave  tolerably  certain  promise  of  a  successful  de- 
fense of  the  post,  and  the  evacuation  meant  certain  disaster,  he 
might  have  been  justified  by  a  military  court  in  presuming  that 
General  Hull  would  not  have  issued  his  order  for  evacuation  if 
he  had  been  in  possession  of  all  the  facts.  In  this  case  only  an 
unqualified  success  in  defending  the  post  without  causing  disaster 
elsewhere  would  have  exonerated  him  in  the  judgment  of  any 
military  tribunal  that  might  have  been  convened  to  pass  judg- 
ment upon  the  action  of  Captain  Heald  had  he  failed  to  obey  his 
orders.  Even  then  the  evacuation  as  related  to  any  larger  stra- 
tegical movement  would  have  to  be  considered.  It  is,  at  best,  taking 
a  grave  responsibility  to  disobey  a  lawful  order. 

It  is  highly  probable,  however,  that  no  available  earthly  power 
could  have  saved  the  garrison  after  General  Hull's  order  was 
received  on  the  9th  of  August.  Fort  Mackinaw,  a  stronger  post, 
had  fallen  more  than  three  weeks  before ;  the  whole  Indian  popu- 


74  HISTORY  OF  THE  BOARD  OF  TRADE 

lation  of  the  Northwest  was  hostile  and,  learning  of  the  intended 
evacuation  of  Fort  Dearborn  as  soon  as  Captain  Heald  did,  and 
probably  before,  began  to  collect  about  the  doomed  post  almost 
immediately;  the  British  had  command  of  the  lakes,  and  could 
have  battered  down  the  stockade  in  short  order;  the  supply  of 
food  was  sufficient  for  a  time,  but  we  may  be  sure  that  a  number 
of  the  fifty-four  regular  soldiers  on  the  roster  of  the  post  were 
sick,  and  while  an  Indian  assault  might  have  been  repulsed,  the 
danger  of  fire  was  ever  present ;  General  Hull  had  retreated  from 
Canada  on  the  8th  of  August,  and  the  Indians,  knowing  the  cam- 
paign had  gone  in  favor  of  their  allies,  were  no  longer  restrained 
by  fear  from  openly  assisting  their  British  friends.  Captain  Heald 
had  all  this  information  on  the  9th  of  August,  except  the  knowledge 
of  General  Hull's  predicament,  and  everything  that  he  then  knew 
made  an  attempt  to  hold  the  post  seem  more  hazardous  than  its 
evacuation,  because  massacre  of  the  entire  white  population,  civil 
as  well  as  military,  would  have  been  likely  to  follow  a  successful 
assault. 

Equally  futile  would  have  been  an  immediate  attempt  to  flee, 
according  to  the  advice  which  the  Indian  runner,  Winnemeg,  is 
said  to  have  given  Captain  Heald.  Fifty  or  sixty  men  in  vigorous 
health  and  inured  to  hardship  of  every  kind  would  have  had  slight 
chance  of  making  a  successful  fight  through  a  hundred  and  fifty 
miles  of  forest  before  they  could  have  been  overtaken  by  the  over- 
whelming odds  the  savages  would  have  thrown  against  them.  En- 
cumbered by  women,  children,  and  sick,  obliged  to  defend  a  wagon 
train,  to  make  roads  through  the  woods,  and  construct  rafts  with 
which  to  cross  the  intervening  rivers,  they  would  have  had  almost 
no  chance  whatever. 

The  only  hope  of  escape  was  to  adopt  the  plan  which  approved 
itself  to  Captain  Heald's  good  judgment,  and  try  to  effect  a  friendly 
agreement  with  the  Indians  which  would  permit  peaceable  with- 
drawal from  the  fort.  In  the  emergency  confronting  him  he  acted 
with  courage  and  good  judgment  up  to  the  time  the  council  was 
held  with  the  Indians. 

Just  what  happened  at  the  council  we  never  shall  know.  We 
may  safely  assume  that  Captain  Heald  never  promised  to  distribute 
arms  or  ammunition  to  the  Indians.  His  orders  left  him  no  discre- 
tion in  regard  to  these  things,  and  Mrs.  Gordon  represents  him  as 
a  stickler  for  military  obedience.  Almost  equally  certain  it  is  that 
he  did  not  promise  to  distribute  the  liquor  belonging  to  the  garrison. 
The  factory  not  being  allowed  to  sell  liquor  to  the  Indians,  prob- 
ably had  none.  But  Captain  Heald  was  at  the  mercy  of  the  inter- 
preters of  whom  Mr.  Kinzie  was  one,  the  others  being  half-breed 
Indians ;  and  the  declaration  of  Black  Hawk  in  after  years  that 
the  attack  was  made  in  retaliation  for  breach  of  agreement  on  the 
part   of   the   Americans,    together   with    the   clumsy    invention    of 


OF  THE  CITY  OF  CHICAGO  75 

Lieutenant  Helm,  already  referred  to,  indicates  that  there  was 
some  misunderstanding.  Responsibility  for  this  rests  either  upon 
Captain  Heald  or  upon  the  interpreters,  and  in  view  of  all  the 
known  tacts  it  is  impossible  to  believe  that  the  commander  of 
the  post  would  have  been  a  party  to  an  agreement  which  he 
intended  to  violate  after  he  should  have  placed  himself  and  his 
command  in  the  power  of  the  Indians. 

Whether  any  agreement  made  by  more  or  less  friendly  Potta- 
watomie chiefs  would  have  been  observed  by  the  younger  war- 
riors of  that  tribe ;  whether,  in  case  all  the  Pottawatomies  near 
Chicago  had  refrained  from  hostilities,  the  bands  from  the  Wabash, 
as  well  as  the  Ottawas  and  Chippewas  of  Michigan,  could  have 
been  controlled,  will  never  be  known.  If  all  these  had  remained 
neutral,  the  large  force  under  Tecumseh,  which  General  Hull's 
surrender  made  available  twenty-four  hours  after  Fort  Dearborn 
was  evacuated,  could  have  destroyed  the  fugitives  before  they 
could  have  reached  the  shelter  of  Fort  Wayne,  although  General 
Hull's  optimistic  expectation  of  the  capture  of  Maiden  warranted 
Captain  Heald  in  dismissing  all  apprehension  of  danger  from  that 
quarter. 

Entire  approval  of  Captain  Heald's  course  in  obedience  to 
General  Hull's  order  does  not  necessarily  carry  approval  of  his 
action,  or  lack  of  action,  prior  to  receipt  of  that  order,  nor  of  his 
tactics  on  the  field  of  battle.  With  no  responsibility,  and  with  a 
knowledge  of  the  disaster  before  us,  and  none  present  to  defend 
the  accused,  it  is  easy,  but  almost  unfair,  to  suggest  that  during  the 
four  months  which  followed  the  murders  at  the  Lee  cabin  he  should 
have  built  boats  in  which  his  garrison  could  escape  if  threatened  by 
the  enemy,  though  it  would  not  seem  to  require  great  initiative  to 
have  done  so.  He  must  have  been  aware  of  the  suppressed  hatred  of 
the  Indians  throughout  the  Northwest ;  of  Tecumseh's  activities ; 
of  the  British  intrigues ;  of  Hull's  expedition  to  Detroit ;  but  he  was 
sent  to  Fort  Dearborn  to  defend,  and  not  to  prepare  to  abandon  it, 
and  doubtless  General  Hull's  order  was  a  surprise  to  every  inmate 
of  the  fort.  If  a  sufficient  number  of  boats  to  carry  ninety-three 
persons,  with  the  necessary  food,  wagons,  horses,  ammunition 
and  other  supplies,  had  been  ready  at  the  time  General  Hull's 
order  was  received,  or  if  they  could  have  been  built  during  the 
next  few  days,  it  would  have  been  an  easy  matter  to  launch  them 
in  the  river,  and  if,  under  protection  of  the  guns  of  the  fort,  they 
could  have  been  gotten  across  the  bar  at  the  river's  mouth,  then 
at  Madison  Street,  and  if  the  weather  had  been  favorable,  this 
means  of  gaining  a  start  of  the  Indians  would  have  been  worthy 
of  consideration.  But  General  Hull's  order,  though  vague,  appar- 
ently contemplated  a  march  by  land,  and  was  so  interpreted  by 
Captain  Heald ;  and  flight  by  water  to  Michigan  City  or  St.  Joseph 
would  not  have  brought  the  fugitives  within  a  hundred  miles  of 


76  HISTORY  OF  THE  BOARD  OF  TRADE 

Fort  Wayne,  and  their  pursuers  would  have  been  likely  to  over- 
take them  before  they  could  reach  that  refuge. 

The  incredible  statement  that  General  Hull's  order  to  evacuate 
the  post  was  read  on  parade  the  next  day  after  it  was  received 
rests  solely  upon  the  authority  of  Mrs.  Kinzie's  "Waubun."  If 
true,  Captain  Heald  is  answerable  for  an  indiscretion  in  making 
public  so  important  a  document,  and  Lieutenant  Helm  would 
have  been  certain  to  incorporate  in  his  "narrative"  a  fact  so  well 
calculated  to  reflect  upon  Captain  Heald's  good  judgment. 

Aside  from  his  personal  courage,  which  was  unquestionable, 
Captain  Heald  is  not  made  to  shine  as  a  leader  of  men  on  the 
battlefield.  No  plan  to  be  followed  in  case  of  attack  appears  to 
have  been  made.  Situated  as  he  was,  the  safety  of  his  wagon 
train  and  its  contents  was  of  supreme  importance  and  should 
have  been  the  main  object  of  his  solicitude.  At  the  first  signal 
from  Captain  Wells,  if  it  was  impossible  to  keep  the  wagons 
moving  forward,  and  a  running  fight  was  therefore  impracticable, 
a  rush  should  have  been  made  for  the  wagons,  instead  of  a 
charge  upon  the  sand  hills,  which  carried  the  command  away  from 
everything  worth  defending.  The  women  and  children  should 
have  been  directed  to  shelter  themselves  in  the  sand  of  the  beach 
as  best  they  might,  the  wagons  utilized  as  a  barricade,  while  under 
the  protection  of  his  hastily  improvised  defenses  Captain  Heald 
could  have  awaited  the  assault  which  the  savages  surely  would 
have  made,  and  which,  notwithstanding  their  great  superiority  in 
numbers,  he  could  in  all  probability  have  repulsed.  Two  or  three 
costly  and  futile  attacks  of  this  kind  would  have  discouraged  the 
Indians  and  enabled  the  column  to  resume  its  march,  unless  indeed 
the  draught  animals  had  been  killed.  Perhaps  the  Calumet  River 
might  have  been  reached  by  nightfall.  Further  progress  then 
would  have  been  arrested  while  the  wagon  beds  were  being  pre- 
pared and  used  as  boats,  or  until  a  raft  of  logs  was  constructed, 
and  meantime  fresh  bands  of  Indians  probably  would  have  joined 
those  already  on  the  trail  of  the  fleeing  soldiers.  Such  a  defense 
as  suggested  above  would  likely  have  exacted  a  far  heavier  toll 
from  his  enemies  and  entitled  Captain  Heald  to  higher  praise  as 
an  Indian  fighter,  but  it  may  well  be  doubted  whether  in  the  end 
the  result  would  have  been  less  calamitous  than  it  was. 

There  were  two  heroes  on  Chicago's  battlefield,  both  of  whom 
deserve  mention.  Captain  William  Wells,  who  led  the  Miamis, 
was  a  Kentucky  boy  stolen  by  the  Indians  from  the  residence  of 
Hon.  Nathaniel  Pope,  when  he  was  twelve  years  old,  and  adopted 
by  Little  Turtle,  a  chief  of  the  Miamis,  whose  daughter  he  married. 
He  fought  for  the  Indians  in  the  campaigns  against  General  Har- 
mar  and  General  Saint  Clair,  but  before  General  Wayne's  campaign 
in  1794  he  was  persuaded  by  Rebekah  Wells,  daughter  of  Colonel 
Samuel  Wells,  his  brother,  to  forsake  the  Indians,  and  live  with  his 


OF  THE  CITY  OF  CHICAGO  77 

own  people.  Rebekah,  who  was  then  a  child,  afterwards  married 
Captain  Nathan  Heald,  and  it  was  in  the  hope  of  saving  her 
that  Captain  William  Wells  led  his  band  of  Miami  Indians  to  Fort 
Dearborn  and  fell  on  the  field  of  honor. 

David  Kennison  (or  Kinnison),  a  private  soldier  in  Captain 
Heald's  company,  had  a  history  without  parallel  known  to  the 
writer,  if  the  following  facts  condensed  from  Quaife's  account  of 
his  career  can  be  relied  upon.  Born  in  New  Hampshire  in  1736, 
a  member  of  the  famous  Boston  Tea  Party  in  1773,  a  participant 
in  the  battles  of  Lexington  and  Bunker  Hill,  as  well  as  other 
engagements  during  the  Revolution,  he  was  in  Chicago  as  early 
as  May,  1804,  and  probably  a  member  of  the  garrison  at  that  time. 
In  March,  1808,  he  enlisted  (probably  a  re-enlistment)  for  the 
regular  term  of  five  years,  and  the  garrison  muster-roll  for  May, 
1812,  shows  that  he  was  present  for  duty  at  that  time.  Although 
his  name  is  not  expressly  mentioned  in  connection  with  the  mas- 
sacre, he  was  presumably  one  of  the  small  number  of  survivors 
who  returned  from  captivity,  of  whom  no  record  is  left. 

After  the  War  of  1812,  in  which  he  claimed  to  have  partici- 
pated further  after  his  escape  from  the  Indians,  Kennison  settled 
in  New  York.  During  his  residence  in  that  state  a  falling  tree 
broke  his  skull,  his  collarbone  and  two  ribs ;  the  discharge  of  a 
cannon  at  a  military  review  broke  both  his  legs ;  and  the  kick 
of  a  horse  left  a  scar  on  his  forehead  which  disfigured  him  for  life. 
Notwithstanding  all  these  mishaps,  he  was  married  four  times 
and  had  twenty-two  children.  He  came  to  Chicago  in  1845,  having 
become  separated  from  all  his  children.  Until  1848  he  was  able 
to  perform  manual  labor  and,  by  the  aid  of  his  pension  for  service 
in  the  Revolution,  to  support  himself.  In  1848  he  entered  the 
Chicago  Museum,  but  the  last  twenty  months  of  his  life  he  was 
bedridden,  although  before  his  death  he  regained  his  sight  and 
hearing,  which  had  been  impaired.  He  died  February  24,  1852,  at 
the  age  of  115  years  3  months  and  17  days,  and  was  buried  with 
the  highest  military  and  civil  honors  in  the  Old  City  Cemetery, 
now  included  in  Lincoln  Park,  where  his  grave  has  been  marked 
by  a  granite  monument  erected  by  the  Sons  of  the  Revolution, 
the  Sons  of  the  American  Revolution,  and  the  Daughters  of  the 
American  Revolution. 

In  the  Chicago  Historical  Society's  rooms  there  is  a  vial  con- 
taining a  small  amount  of  tea,  accompanied  by  an  affidavit  made 
by  David  Kennison  in  1848  to  the  effect  that  this  tea  was  saved 
by  himself  "from  the  cargoes  destroyed  in  Boston  Harbor  in  the 
early  evening  of  the  16th  of  November,  1773."  The  affidavit  is 
witnessed  by  five  well-known  residents  of  Chicago  at  that  time, 
among  whom  was  Fernando  Jones,  who  was  a  prominent  citizen 
of  the  city  until  his  death  in  November,  1911. 

Mr.  George  G.  Reed,  a  well-known  member  of  the  Board  of 


78  HISTORY  OF  THE  BOARD  OF  TRADE 

Trade,  whose  great-aunt  was  David  Kennison's  last  wife,  is  author- 
ity for  the  statement  that  when  the  veteran  was  108  years  old  he 
walked  in  a  single  day  from  Watertown,  New  York,  to  Sacketts 
Harbor,  a  distance  of  about  eleven  miles. 

There  is  no  reason  to  question  the  main  facts  in  this  biography 
of  David  Kennison,  and  Mr.  Quaife's  well-known  industriousness 
as  an  investigator  lends  weight  to  his  conclusions,  although  in  an 
obscure  note  to  page  256  he  suggests  his  own  doubt  as  to  some 
details.  Nevertheless,  it  may  well  be  questioned  whether  the 
David  Kennison  of  the  Boston  Tea  Party  was  in  the  Fort  Dearborn 
garrison  at  the  time  of  the  massacre.  A  man  of  that  name  was  on 
the  muster  roll  of  Captain  Heald's  company  for  May  31,  1812,  and 
presumably  was  present  at  the  time  of  the  evacuation  of  the  post. 
But  there  is  no  further  mention  of  his  name,  although  the  fate 
of  nearly  every  other  member  of  the  garrison  was  ascertained. 
Mr.  Quaife  infers  "from  our  knowledge  of  his  later  life  and  death 
at  Chicago"  that  David  Kennison  was  one  of  those  who  survived 
the  battle,  was  made  prisoner,  and  afterwards,  in  some  way,  re- 
turned to  civilization.  This  inference  is  unwarranted,  because  a 
soldier  76  years  old,  with  such  a  record  as  Kennison's,  could  not 
have  dropped  out  of  the  memory  of  his  company  officers  and  of 
his  comrades,  and  his  name  would  have  been  pretty  sure  to  be 
included  in  the  list  of  casualties  or  among  the  survivors.  Further- 
more, a  statement  made  by  the  survivor  of  the  Boston  Tea  Party 
seems  conclusive. 

In  the  Chicago  "Democrat"  of  November  6,  1848,  David  Kenni- 
son published  a  card  announcing  his  determination  to  vote  for  Cass 
and  Butler,  the  Democratic  candidates  for  President  and  Vice- 
President.  After  giving  his  record  in  the  Revolutionary  War,  he 
says,  "When  the  last  war  broke  out  I  was  living  at  Portland,  Maine, 
where  I  enlisted,  and  marched  to  Sacketts  Harbor  and  was  in  the 
battle  at  that  place  and  also  at  other  places." 

If  he  had  been  in  the  Chicago  garrison  at  the  time  of  the 
massacre,  would  he  have  omitted  to  mention  the  fact  in  this  com- 
munication to  the  citizens  of  Chicago? 

If  not  a  coincidence  in  names,  it  might  be  possible  that  the 
David  Kinnison  whose  name  appears  in  the  muster  roll  of  Captain 
Heald's  company  may  have  been  a  son  of  the  David  Kennison  who 
participated  in  the  Boston  Tea  Party. 

It  would  have  been  impossible  for  a  man  to  have  been  in 
Portland,  Maine,  at  the  outbreak  of  the  War  of  1812  and,  by  any 
means  of  travel  then  available,  reach  Chicago  in  time  to  be  present 
at  the  Fort  Dearborn  massacre. 

During  the  War  of  1812 

Three  days  after  the  massacre,  Kinzie's  Indian  friends  per- 
mitted him  and  his  family,  including  Mrs.  Helm,  to  go  by  boat 


OF  THE  CITY  OF  CHICAGO  79 

along  the  shore  of  the  lake  to  their  old  home  at  Bertrand,  Michi- 
gan, on  the  Saint  Joseph  River,  where  they  were  protected  by 
Chief  Topenebe,  and  in  November  taken,  except  Mr.  Kinzie,  to 
Detroit  and  delivered  to  the  British  Indian  agent  as  prisoners  of 
war.  Mr.  Kinzie  followed  in  December,  and  upon  his  arrival  he 
was  paroled  by  General  Proctor  and  with  his  family  occupied 
his  former  residence  in  that  city.  Later,  General  Proctor  arrested 
him  and  confined  him  in  Fort  Maiden,  where  he  heard  the  battle 
between  the  British  and  American  fleets  which  decided  the  ques- 
tion of  naval  supremacy  on  the  lakes,  and  with  it  the  destiny  of 
the  Northwest. 

The  day  after  the  evacuation  of  Fort  Dearborn  and  the  defeat 
and  massacre  of  its  garrison,  General  Hull  surrendered  the  fort  at 
Detroit,  together  with  all  the  troops  under  his  command,  and  the 
territory  of  Michigan,  leaving  the  frontier  settlements  in  central 
Ohio  and  southern  Indiana,  as  well  as  all  of  Michigan,  Wisconsin 
and  Illinois,  open  to  the  incursions  of  the  savages,  with  only  such 
restraint  upon  their  actions  as  could  be  imposed  by  the  garrisons 
at  Fort  Wayne,  and  Fort  Harrison,  near  Terre  Haute.  These  posts 
soon  were  attacked  by  the  enemy,  but  the  splendid  defense  of  Fort 
Harrison  made  by  the  little  garrison  under  Captain  Zachary  Taylor, 
on  the  4th  of  September,  and  the  relief  of  Fort  Wayne  by  the 
militia  of  Kentucky  and  Ohio  under  General  Harrison  on  the  12th, 
discouraged  the  Indians  in  Indiana  and  Ohio,  while  those  in  the 
territory  of  Illinois  were  soon  given  so  much  to  occupy  them  at 
home  that  they  had  no  leisure  to  practice  there  deviltry  elsewhere. 
"Since  the  destruction  of  Chicago  there  were  no  white  inhabit- 
ants in  the  whole  territory  of  Illinois,  north  of  a  line  drawn  from 
Shawneetown  to  Greenville,  Bond  County,  thence  to  the  Missis- 
sippi River  a  little  north  of  Alton,  except  some  sparse  settlements 
on  the  west  bank  of  the  Wabash,  opposite  Vincennes,  the  old 
town  of  Peoria,  which  had  never  been  brought  within  the  juris- 
diction of  the  territorial  government,  and  Prairie  du  Chien,  which 
was  then  within  the  limits  of  Illinois  territory."  (Blanchard,  Vol.  I, 
p.  420.) 

But  south  and  west  of  the  line  above  mentioned  were  the 
flourishing  settlements  at  Kaskaskia,  the  capital  of  the  territory, 
Cahokia,  and  elsewhere  on  the  Mississippi  River  below  St.  Louis, 
and  scattered  settlements  at  other  points,  the  total  white  popu- 
lation embraced  within  the  present  limits  of  the  state  of  Illinois 
in  1812  being  probably  over  15,000  and  under  20,000  souls.  The 
disasters  at  Chicago,  Mackinac,  and  Detroit,  and  the  invasion  of 
Ohio,  Michigan  and  Indiana  by  the  Indians  roused  the  country  to 
action,  and  in  October,  Governor  Ninian  Edwards  led  an  expedition 
against  the  Indians  of  the  Illinois  and  Wabash  rivers,  which  admin- 
istered to  them  partial  retribution  for  their  barbarity  at  Chicago 

In  1813  another  expedition  from  Fort  Russell,  near  Edwards- 


80  HISTORY  OF  THE  BOARD  OF  TRADE 

ville,  built  a  fort  where  Peoria  now  stands,  and  named  it  Fort  Clark, 
in  honor  of  Colonel  George  Rogers  Clark,  upon  whom  the  rank 
of  brigadier-general  was  conferred  in  1781.  The  war  in  the  lower 
lake  region  continued  with  varying  success  until  Perry's  signal 
victory  on  Lake  Erie,  September  10,  1813,  gave  the  Americans  the 
ascendancy,  and  the  British  abandoned  Detroit,  which  was  no  longer 
tenable,  and  were  soon  defeated  in  upper  Canada.  The  control 
of  the  lakes  and  the  reoccupation  of  Detroit  relieved  the  border 
settlements  in  Ohio  and  Indiana  from  the  menace  of  Indian  inva- 
sion ;  but  the  savages  still  held  the  greater  part  of  Michigan,  all 
of  Wisconsin,  and  most  of  northern  Illinois  at  the  close  of  the 
year  1813.  Early  in  the  following  year  Prairie  du  Chien  was  occu- 
pied by  an  expedition  from  St.  Louis,  only  to  succumb  in  turn  to  a 
large  force  of  British  and  Indians,  who  continued  to  hold  it  until 
the  close  of  the  war.  An  attempt  to  take  Fort  Mackinac  resulted 
in  failure,  and  no  effort  was  made  to  reoccupy  Chicago  until  after 
the  treaty  of  peace  in  1815. 

The  bones  of  those  who  died  on  that  fatal  day  in  August,  1812, 
lay  unburied  on  the  sand  dunes  where  they  fell  between  Sixteenth 
and  Twentieth  Streets  and  between  Michigan  Avenue  and  the 
lake,  until  1816,  when  Fort  Dearborn  was  rebuilt  and  garrisoned 
by  two  companies  of  infantry  under  Captain  Hezekiah  Bradley, 
U.  S.  A.,  and  at  last  the  remains  of  the  victims  of  Indian  treachery 
and  barbarity  were  collected  and  given  decent  burial. 

The  new  Fort  Dearborn  was  larger  than  the  old  one,  but  occu- 
pied the  same  site,  and  consisted  of  a  square  stockade  inclosing 
barracks,  quarters  for  the  officers,  magazine  and  provision  store, 
and  was  defended  by  bastions  at  the  northwest  and  southwest 
angles.  The  blockhouse  was  in  the  southwest  corner.  The  officers' 
quarters  were  on  the  west  side,  and  the  soldiers'  barracks  on  the 
east  side.  The  fort  had  two  gates,  one  on  the  north  and  the  other 
on  the  south  side. 

Antoine  Ouilmette,  the  Canadian  Frenchman,  previously 
mentioned  as  occupying  with  his  Indian  wife  one  of  the  four 
cabins  which  composed  the  little  settlement  in  1803,  entered 
the  service  of  Mr.  Kinzie  somewhat  later ;  and  when  the  boat 
containing  the  Kinzie  family  departed  for  St.  Joseph,  three  days 
after  the  massacre,  Ouilmette  was  the  only  white  inhabitant  of 
Chicago. 

Some  time  in  1812,  Jean  Baptiste  Beaubien,  afterwards  known 
as  Colonel  and  General  Beaubien,  a  trader  born  in  Detroit  in  1780, 
who  had  been  established  in  Milwaukee  since  1800,  bought  the  Lee 
cabin  and  garden  south  of  the  old  fort,  of  the  widow  of  Charles 
Lee,  the  former  owner,  who  was  undoubtedly  among  the  killed  on 
the  day  of  the  massacre.  Beaubien's  first  wife  was  an  Indian 
woman,  but  soon  after  coming  to  Chicago  he  married  Josette  La 
Framboise,   daughter   of  Francis   La   Framboise,   a   French   trader 


OF  THE  CITY  OF  CHICAGO  81 

who  had  established  himself  on  the  south  branch  of  the  river,  not 
far  from  Beaubien's  place. 

Two  other  traders  came  to  Chicago  before  Fort  Dearborn  was 
rebuilt.  A  Frenchman  named  Du  Pin,  who  ransomed  from  her 
Indian  captor  and  married  the  widow  of  Charles  Lee ;  and  Alexan- 
der Robinson,  a  half-breed  chief  of  the  Pottawatomies,  whose 
friendship  for  the  whites  in  after  years  proved  of  the  greatest 
value  to  them. 

After  the  War 

The  Treaty  of  Ghent,  which  brought  the  war  of  1812  to  a 
close,  was  signed  December  24,  1814,  and  ratified  by  the  Congress 
of  the  United  States  February  17,  1815.  Both  England  and  the 
United  States  were  in  need  of  peace,  and  each  of  them  made  impor- 
tant and  almost  humiliating  concessions  to  obtain  it.  The  United 
States  failed  to  extort  from  Great  Britain  a  formal  renunciation 
of  the  alleged  right  of  search  and  impressment,  and  Great  Britain 
finally  abandoned  the  effort  to  exclude  citizens  of  the  United 
States  from  their  own  territory  in  the  Northwest,  which  had  been 
for  almost  half  a  century  a  cardinal  aim  of  her  policy,  and  left 
the  Indians,  who  had  been  her  efficient  allies  in  this  disgraceful 
business,  to  their  fate.  Forsaken  by  their  "British  Fathers,"  the 
Indians  themselves  realized  the  impossibility  of  contending  against 
the  victorious  "Long  Knives,"  soon  sold  their  remaining  lands,  and 
agreed  to  make  new  homes  for  themselves  west  of  the  Mississippi 
River. 

Treaties  were  made  in  1816,  1818,  1819,  1821,  1828,  1830,  and 
later  years  with  different  tribes  of  Indians,  and  their  titles  to  the 
lands  east  of  the  Great  River  were  gradually  extinguished.  In 
some  instances,  where  the  same  lands  were  claimed  by  two  tribes 
of  Indians,  the  disputed  territory  was  bought  from  each  tribe,  the 
Pottawatomies  having  a  special  faculty  of  claiming  proprietorship 
in  every  region  through  or  near  which  they  had  wandered. 

As  the  cunning  of  Pontiac  failed  to  exterminate  the  English 
and  their  colonists  in  1763,  so  the  eloquence  and  personal  valor  of 
Tecumseh  were  displayed  in  vain  against  the  flood  of  immigration 
from  the  older  American  communities,  which,  before  the  War  of 
1812,  had  begun  to  take  possession  of  lands  in  northern  Ohio  and 
Indiana,  purchased  from  the  Indians  under  treaties  made  prior  to 
the  battle  of  Tippecanoe,  and  which,  with  the  final  elimination  of 
the  English  intrigue,  and  the  defeat  of  the  savages,  had  become  irre- 
sistible. United  States  Census  Reports  show  the  magnitude  of 
this  immigration  better  than  any  words  can  describe  it. 

Prior  to  the  settlement  of  Marietta  in  1788,  nearly  the  whole 
of  the  Northwest  Territory  was  a  wilderness,  while  there  had  been 
for  years  a  steady  migration  from  Virginia  and  other  states  on 
the  Atlantic  seaboard  into  the  region  south  of  the  Ohio. 


82  HISTORY  OF  THE  BOARD  OF  TRADE 

In  1810  the  population  of  Kentucky  was 406,511 

In  1810  the  population  of  Tennessee  was 261,727 

Total 668,238 

The  population  of  Ohio  was 230,760 

The  population  of  Indiana  was 24,520 

The  population  of  Michigan  was 4,762 

The  population  of  Illinois^  was 12,282 

Total  in  Northwest  Territory 272,324 

In  1810,  therefore,  more  than  three-fourths  of  the  total  population 
of  the  Northwest  Territory  had  come  into  it  during  the  preceding 
decade,  the  whole  number  of  inhabitants  in  1800  having  been  51,006. 

But  the  census  of  1820  showed: 

Population  of  Ohio 581,434 

Population  of   Indiana 147,178 

Population  of  Illinois 55,21 1 

Population  of  Michigan 8,765 

Total 792,588 

During  the  first  two  decades  of  the  nineteenth  century,  there- 
fore, nearly  three-quarters  of  a  million  people  migrated  from  the 
older  states  into  this  wilderness  which  was  known  as  the  North- 
west Territory,  a  number  in  excess  of  the  population  of  any  one 
of  those  states  (except  Virginia)  in  the  year  1800;  and  more  than 
two-thirds  of  these  immigrants  came  into  this  new  land  between 
1810  and  1820,  notwithstanding  the  Indian  disturbances  and  the 
War  of  1812,  which  made  settlement  hazardous  during  the  first 
half  of  the  decade. 

These  figures  are  impressive  in  themselves,  but  doubly  so 
when  it  is  borne  in  mind  that  these  pioneers  were  nearly  all 
American  born,  the  great  migration  from  the  old  world  which  filled 
up  the  Middle  West  a  few  years  later,  and  to  which  reference  will  be 
made  hereafter,  not  having  begun.  Nor  did  they  come  in  palace 
cars  or  tourist  sleepers.  They  came  on  foot,  on  horseback,  or  in 
"prairie  schooners"  drawn  by  oxen  ;  not  over  macadamized  roads, 
but  over  forest  paths  and  trails  which  in  wet  weather  were  well- 
nigh  impassable.  Rivers  were  to  be  crossed ;  there  were  no  bridges 
and  few  ferries.  Fortunate  indeed  were  those  whose  destination 
permitted  them  to  use  a  flatboat  on  the  Ohio  River  for  a  portion 
of  their  journey. 

Naturally,  the  greater  part  of  this  increment  to  the  popula- 
tion of  the  Northwest  lodged  in  the  region  east  of  the  dense  forest 

1  Including  Wisconsin. 


OF  THE  CITY  OF  CHICAGO  83 

which  then  covered  all  of  Indiana  and  Michigan ;  but  the  French 
settlements  on  the  American  bottom  had  received  accessions  from 
Kentucky.  Virginia,  Pennsylvania  and  other  states  farther  south, 
even  before  Kaskaskia  became  the  capital  of  the  Territory,  Feb- 
ruary 3,  1809.  Indeed,  some  of  Colonel  George  Rogers  Clark's 
soldiers  had  settled  in  southern  Illinois  shortly  after  the  Revolu- 
tion, and  before  the  War  of  1812  there  were  settlements  on  the 
west  side  of  the  Wabash   River,   opposite  and  below   Vincennes. 

Although  much  farther  west  than  the  border  settlements  in 
Ohio  and  Indiana,  and  beyond  the  wall  of  forests  which  separated 
them  from  northern  Illinois,  southern  Illinois  was  more  easily  acces- 
sible from  the  southern  states  because  of  the  Ohio,  Tennessee  and 
Cumberland  rivers,  which  furnished  a  convenient  highway  for  the 
cheap  and  easy  conveyance  of  men  and  goods,  and  as  a  result,  when 
the  state  was  admitted  to  the  Union,  December  3,  1818,  nearly  all 
its  population  of  a  little  less  than  50,000  was  south  of  a  line  running 
west  by  north  from  Vincennes,  Indiana,  on  the  Wabash  River,  to 
a  point  on  the  Mississippi  a  little  north  of  Alton, 

But  at  this  time,  and  for  years  afterward,  Chicago  was  un- 
touched by  the  advancing  wave  of  humanity  which  in  a  few  short 
years  had  converted  the  wilderness  into  populous  states,  and  re- 
placed the  horrors  of  an  Indian  foray  with  the  busy  hum  of  peace- 
ful industry.  Jean  Baptiste  Beaubien  and  his  new  wife  continued 
to  live  there,  and  in  1817  he  bought  and  occupied  a  more  preten- 
tious house  which  an  army  contractor  named  Dean  had  built  in 
1815  near  where  the  foot  of  Randolph  Street  is  now. 

In  1816,  John  Kinzie  and  his  family  returned  to  the  home  on 
the  north  side  of  the  Chicago  River  which  they  had  been  compelled 
to  abandon  four  years  before,  and  in  October,  1818,  Gurdon  Salton- 
stall  Hubbard,  a  young  employe  of  the  American  Fur  Company, 
made  his  first  visit  to  the  site  of  the  city  of  which  in  after  years 
and  under  changed  conditions  he  was  to  become  a  leading  citizen. 

In  the  same  year  the  Treaty  of  St.  Louis  was  made,  by  which 
"the  Ottawa  and  Chippewa  Indians  ceded  to  the  United  States 
the  lands  surrounding  the  head  of  Lake  Michigan,  ten  miles 
north  and  ten  miles  south  of  the  mouth  of  the  Chicago  Creek, 
and  back  to  the  Kankakee,  Illinois  and  Fox  rivers,"  covering  the 
route  of  the  proposed  Illinois  and  Michigan  Canal. 

In  1818  the  American  Fur  Company,  of  which  John  Jacob 
Astor  was  the  controlling  power,  established  a  station  in  Chicago 
with  Jean  Baptiste  Beaubien  as  resident  agent,  and  in  a  few  years 
almost  monopolized  the  fur  business  of  Chicago  and  vicinity. 
Neither  the  independent  traders  nor  the  government  factory  was 
able  to  secure  enough  business  to  keep  them  alive,  and  in  1822 
the  affairs  of  the  factory  were  wound  up  and  the  Factor  withdrawn. 

For  nearly  a  dozen  years  after  the  rebuilding  of  Fort  Dear- 
born the  annals  of  Chicago  are  barren  of  important  incidents.     It 


84  HISTORY  OF  THE  BOARD  OF  TRADE 

was  the  same  mudhole  at  the  mouth  of  a  sluggish  bayou  on  the 
shore  of  Lake  Michigan  which  the  early  French  explorers  had 
found,  and  of  whose  future,  at  least  Joliet,  who  suggested  the 
Lakes-to-the-Gulf  waterway,  must  have  had  some  conception.  Nor 
was  there  anything  in  local  conditions  at  this  period  to  encourage 
a  believer  in  the  great  destiny  awaiting  the  little  settlement  in 
which  the  Kinzie  and  Beaubien  families  were  for  years  almost 
the  only  permanent  white  civilian  residents.  Perhaps  Joliet  him- 
self might  have  lost  hope  if  in  1823  he  could  have  visited  the  place 
when  an  expedition  to  the  source  of  St.  Peter's  River,  under  com- 
mand of  Major  Long,  U.  S.  A.,  stopped  at  Fort  Dearborn.  Keat- 
ing, the  historian  of  the  expedition,  writes : 

"As  a  place  of  business,  it  ofifers  no  inducement  to  the  settler. 
*  *  *  It  is  not  impossible  that  at  some  distant  day,  when  the 
banks  of  the  Illinois  shall  have  been  covered  with  a  dense  popu- 
lation, and  when  the  low  prairies  which  extend  between  that  river 
and  Fort  Wayne  shall  have  acquired  a  population  proportionate 
to  the  produce  which  they  can  yield,  that  Chicago  may  become 
one  of  the  points  in  the  direct  line  of  communication  between  the 
northern  lakes  and  the  Mississippi,"  but  even  then  he  thinks  the 
amount  of  trade  will  be  limited. 

He  says  (p.  165)  :  "The  provisions  for  the  garrison  were,  for 
the  most  part,  conveyed  from  Mackinaw  in  a  schooner,  and  some- 
times they  were  brought  from  St.  Louis,  a  distance  of  three  hun- 
dred and  eighty-six  miles,  up  the  Illinois  and  Des  Plaines  rivers." 
Nor  is  he  more  complimentary  when  speaking  of  the  people.  He 
says,  "The  village  presents  no  cheering  prospect,  as,  notwithstand- 
ing its  antiquity,  it  consists  of  but  few  huts,  inhabited  by  a  miser- 
able race  of  men,  scarcely  equal  to  the  Indians  from  whom  they 
are  descended." 

The  State  of  Illinois 

Of  all  the  men  who  had  to  do  with  the  founding  of  Chicago, 
Nathaniel  Pope  deserves  the  chief  honor.  He  was  the  delegate 
in  Congress  from  the  territory  of  Illinois  in  1818,  and  in  January 
of  that  year  he  received  from  the  territorial  legislature  a  petition 
asking  Congress  to  admit  the  territory  into  the  Union  as  a  state. 

It  will  be  remembered  that  the  Ordinance  of  1787  provided  that 
not  less  than  three  nor  more  than  five  states  should  be  carved  out 
of  the  Northwest  Territory,  Congress  reserving  the  right  to  form 
one  or  two  states  "north  of  an  east  and  west  line  drawn  through 
the  southerly  bend  or  extreme  of  Lake  Michigan."  After  organi- 
zation of  the  territory  of  Michigan  north  of  the  line  above  men- 
tioned, in  1805,  the  territory  of  Illinois  extended  from  the  junc- 
tion of  the  Ohio  and  Mississippi  rivers  northward  to  the  Canadian 
boundary,  and  included  the  present  state  of  Wisconsin  and  the 
northern  peninsula  of  Michigan.    It  was  expected  that  when  Illinois 


OF  THE  CITY  OF  CHICAGO  85 

should  be  admitted  to  the  Union  as  a  state,  Congress  would  make 
the  east  and  west  line  above  mentioned  its  northern  boundary. 
Fortunately  for  the  city  of  Chicago,  the  state  of  Illinois  and  the 
nation,  Nathaniel  Pope,  upon  his  own  initiative  and  responsibility, 
secured  the  adoption  of  an  amendment  extending  the  northern 
boundary  of  the  state  to  the  line  of  42°  30'  north  latitude,  more 
than  sixty  miles  north  of  the  line  originally  chosen.  The  Illinois 
and  Michigan  Canal  was  even  then  in  contemplation,  and  the 
slavery  question  had  already  divided  the  interests  of  the  people 
of  the  United  States  into  a  "North"  and  a  "South."  By  far  the 
larger  part  of  the  population  of  Illinois  had  come  from  slave- 
holding  states,  and  its  commerce  was  carried  almost  wholly 
by  the  rivers  which  washed  its  shores,  the  Wabash,  Ohio,  and 
Mississippi. 

Judge  Pope  foresaw,  and  impressed  upon  his  fellow  members 
of  Congress,  the  vital  necessity  of  making  Illinois  a  great  state  and 
giving  it  a  commercial  outlet  upon  Lake  Michigan  as  a  counter- 
poise to  the  considerable  trade  it  already  carried  on  upon  the 
southern  rivers.  To  do  this,  it  was  necessary  that  the  canal  and 
its  northern  terminus  should  be  wholly  within  the  limits  of  Illinois 
and  that  there  should  be  a  tributary  country  behind  Chicago  exten- 
sive enough  to  support  "a  population  capable  of  exercising  a  de- 
cided influence  upon  the  councils  of  the  state."  "It  was  foreseen 
that  none  of  the  great  states  in  the  West  could  venture  to  aid  in 
dissolving  the  Union,  without  cultivating  a  state"  situated  as 
Illinois  would  be,  when  a  great  commerce  upon  the  northern  lakes 
should  be  linked  by  the  Lakes-to-the-Gulf  waterway,  with  the  traffic 
already  developed  on  the  Mississippi,  Ohio,  Wabash,  Cumberland 
and  Tennessee  rivers,  centering  at  the  Point,  as  Cairo  was  then 
known.  If  a  line  drawn  west  from  the  southern  extremity  of  Lake 
Michigan  had  been  made  the  northern  boundary  of  Illinois,  the 
state  would  have  had  no  port  on  Lake  Michigan ;  the  people  would 
have  lost  much  of  their  interest  in  the  proposed  canal ;  fourteen 
of  the  richest  counties  now  under  its  jurisdiction  would  have  been 
in  Wisconsin,  and  when  the  great  crisis  precipitated  by  the  attempt 
to  dissolve  the  Union  in  1861  arrived,  the  pro-slavery  sentiment 
of  the  southern  part  of  the  state  would  have  dominated  its  coun- 
cils, and  probably  thrown  its  influence  in  favor  of  the  Southern 
Confederacy.  Controlling  the  only  lines  of  railroad  communi- 
cation between  the  loyal  states  west  of  the  Mississippi  River  and 
the  East,  Illinois  would  have  been  a  great  salient  thrust  into  the 
heart  of  the  Union,  its  broad  plains  would  have  been  the  battle- 
ground of  the  contending  armies,  and  it  cannot  be  doubted  that 
its  power  exerted  on  the  side  of  the  secessionists  might  have  con- 
tributed to  the  overthrow  of  the  Union  cause. 

A  convention  at  Kaskaskia,  the  capital  of  the  territory,  having 
adopted  a  constitution  acceptable  to  Congress,  in  accordance  with 


86  HISTORY  OF  THE  BOARD  OF  TRADE 

the  Enabling  Act  of  April  18,  1818,  the  state  of  Illinois  was 
admitted  to  the  Union,  December  3,  1818.  Anticipating  this  favor- 
able action,  Shadrach  Bond  was  elected  the  first  governor,  and 
in  his  first  message  made  a  strong  recommendation  in  favor  of 
the  Illinois  and  Michigan  Canal. 

Two  years  after  the  admission  of  the  state  to  the  Union,  the 
speculation  in  lands  came  to  an  end  and  "nearly  the  whole  people 
were  irrevocably  involved  in  debt.  *  *  *  The  great  tide  of  immi- 
grants from  abroad,  which  had  been  looked  for  by  everyone,  failed 
to  come."    (Ford,  p.  44.) 

In  1821  the  legislature  created  a  state  bank,  the  provisions  of 
the  act  making  its  insolvency  inevitable,  and  within  three  years 
the  bills  issued  by  the  bank  had  depreciated  about  66%  per  cent, 
involving  the  state  in  enormous  losses. 

In  August  of  the  same  year  Governor  Lewis  Cass  of  the  terri- 
tory of  Michigan,  acting  for  the  United  States  government,  held 
a  council  at  Chicago  with  the  Pottawatomies,  Ottawas  and  Chip- 
pewas.  More  than  three  thousand  Indians  belonging  to  these  tribes 
assembled  in  Chicago,  where  rations  were  issued  to  them  at  the 
expense  of  the  government ;  and  after  many  days  of  deliberation 
and  much  speaking,  a  treaty  was  signed  by  which  in  return  for 
annuities  and  for  other  considerations  the  Indians  ceded  to  the 
United  States  about  five  million  acres  of  land  in  Michigan. 

In  1823  the  garrison  was  withdrawn  from  Fort  Dearborn,  the 
military  authorities  believing  that  the  fortified  posts  on  the  Mis- 
sissippi River  at  Rock  Island,  Prairie  du  Chien,  the  Falls  of  St. 
Anthony,  at  Mackinac  and  Green  Bay  made  the  retention  of  a 
garrison  at  Chicago  no  longer  necessary.  On  the  2d  of  September 
in  this  year  an  election  was  ordered  by  the  commissioners  of  Fulton 
County,  in  which  Chicago  was  then  situated,  the  polls  at  Chicago 
to  be  opened  at  the  house  of  John  Kinzie. 

March  30,  1822,  Congress  granted  the  state  of  Illinois  per- 
mission to  cut  a  canal  through  the  twenty-mile  strip  between  Chi- 
cago and  Ottawa,  purchased  from  the  Indians  by  the  Treaty  of 
St.  Louis  in  1816,  and  donated  to  the  state  of  Illinois  ninety  feet 
on  each  side  of  said  canal.  Surveys  were  made  in  the  two  follow- 
ing years,  and  in  1825  a  company  was  organized  with  a  capital  of 
one  million  dollars.  It  was  proposed  to  make  the  canal  of  sufficient 
size  to  admit  boats  thirteen  and  a  half  feet  in  width  and  drawing 
three  feet  of  water.  But  the  company  was  unable  to  raise  the 
necessary  funds,  and  in  the  following  year  the  legislature  annulled 
the  act  creating  the  canal  company. 

Chicago  at  this  time  (1825)  was  in  Peoria  County,  and  on 
September  6,  1825,  the  Peoria  County  Court  issued  the  following 
order:  "Ordered:  That  the  first  precinct  contain  all  that  part  of 
the  county  east  of  the  mouth  of  the  Du  Page  River,  where  it 
empties  its  waters  into  the  Auxplaines  River,  and  that  the  elections 


OF  THE  CITY  OF  CHICAGO  87 

be  held  at  the  Agency  House  or  Cobweb's  Hall  on  southwest  corner 
of  North  State  and  North  Water  Streets." 

An  exciting  election  in  August,  1824,  resulted  in  the  defeat 
of  a  strenuous  effort  made  by  the  pro-slavery  men  to  force  an 
amendment  to  the  state  constitution  permitting  the  holding  of 
slaves,  in  defiance  of  the  provision  of  the  Ordinance  of  1787  pro- 
hibiting slavery  in  the  region  northwest  of  the  Ohio  River  and 
east  of  the  Mississippi. 

The  following  are  the  names  of  all  taxpayers  in  the  vicinity 
of  Fort  Dearborn  in  1825,  with  the  amount  of  assessable  property 
of  each  :  John  B.  Beaubien,  $1,000;  Jonas  Clybourne,  $625  ;  John  K. 
Clark,  $250;  John  Crafts,  $5,000;  Jeremy  Clairmont,  $100;  Louis 
Contra,  $50;  John  Kinzie,  $500;  Claude  La  Framboise,  $100;  Joseph 
La  Framboise,  $50;  David  McKee,  $100;  Peter  Piche,  $100;  Alex- 
ander Robinson,  $200;  Alexander  Wolcott,  $572;  Antoine  Wilmet 
(Ouilmette),  $400.  The  rate  of  taxation  was  1  per  cent.  If  there 
were  no  tax-dodgers,  the  total  amount  of  taxes  was  $90.47. 

Of  these  fourteen  men  whose  names  are  on  the  assessment  roll 
of  Peoria  County  in  1825,  Alexander  Robinson  was  a  half-breed 
Indian,  and  one  of  the  Pottawatomie  Chiefs,  who  probably  lived 
near  the  forks  on  the  West  Side ;  Jonas  Clybourne  and  family,  and 
John  K.  Clark  and  his  Indian  wife,  lived  on  the  North  Branch, 
about  three  miles  from  Fort  Dearborn ;  the  La  Framboise  brothers 
lived  at  "Hardscrabble"  on  the  South  Branch,  about  four  miles 
from  the  fort;  Alexander  Wolcott  was  the  Indian  agent,  having  suc- 
ceeded Charles  Jouett,  whose  second  term  of  office  lasted  about  two 
years,  viz.,  from  the  rebuilding  of  the  fort  until  1818;  John  Kinzie 
was  the  early  settler  of  1804,  who  was  appointed  justice  of  the 
peace  for  Peoria  County  in  July,  and  agent  of  the  American  Fur 
Company  in  the  latter  part  of  the  year  1825,  upon  the  death  of 
John  Crafts,  who  had  held  that  position  for  several  years ;  John 
B.  Beaubien  was  the  well-known  Frenchman  and  trader;  Antoine 
Ouilmette  will  be  remembered  as  the  earliest  continuous  resident ; 
David  McKee  was  the  blacksmith  attached  to  the  Indian  Agency; 
Jeremy  Clermont  and  Peter  Piche  were  Indian  traders. 

Modern  life  is  dependent  upon  railroad  facilities,  and  it  is  diffi- 
cult for  us  to  realize  that  within  the  memory  of  persons  now  living, 
the  transportation  of  heavy  articles  over  great  distances  by  land, 
was  as  difficult  as  in  the  days  of  Nineveh  or  Babylon.  Navigable 
waterways  always  have  determined  the  location  of  great  commer- 
cial cities,  but  never  was  the  superior  economy  of  water  carriage 
so  great  as  in  the  first  quarter  of  the  nineteenth  century,  when 
steam  power  had  been  applied  to  river  navigation,  but  not  to  rail- 
ways, and  nowhere  was  the  contrast  between  land  and  water 
traffic  so  marked  as  in  the  newly  occupied  portions  of  the  United 
States,  where  bottomless  roads  and  a  sparse  population  put  a  prac- 
tical embargo  upon  the  movement  of  agricultural  products  across 


88  HISTORY  OF  THE  BOARD  OF  TRADE 

the  country.  Realizing  these  conditions,  the  people  of  New  York 
had  in  1825  completed  the  Erie  Canal  connecting  the  navigable 
water  of  Lake  Erie  with  navigable  water  in  the  Hudson  River. 
In  1827  Congress,  which  had  been  appealed  to  for  aid  for  the  Illinois 
and  Michigan  Canal,  granted  to  the  state,  in  its  behalf,  290,915 
acres  of  land,  being  alternate  sections  of  the  public  land  on  each 
side  of  the  canal  for  five  miles  in  width  along  its  entire  route.  The 
General  Assembly  accepted  this  grant  in  1829,  and  appointed  Com- 
missioners who  selected  the  lands,  caused  them  to  be  surveyed, 
and  in  1830,  platted,  on  the  south  half  of  Section  Nine,  Township 
Thirty-nine  North,  of  Range  Fourteen,  East  of  the  Third  Principal 
Meridian,  the  Original  Town  of  Chicago,  which  was  bounded  on 
the  North  by  Kinzie  Street,  on  the  East  by  State  Street,  on  the 
South  by  Madison  Street,  and  on  the  West  by  Desplaines  Street. 
East  of  the  town  thus  laid  out  was  the  United  States  Military 
reservation  upon  a  portion  of  which  stood  Fort  Dearborn.  South 
of  Fort  Dearborn,  where  the  southwest  corner  of  Michigan  Avenue 
and  South  Water  Street  is  now,  stood  John  B.  Beaubien's  house, 
and  upon  his  occupancy  of  this  house  and  garden  for  years  he 
based  his  pre-eption  right  to  the  southwest  fractional  quarter  of 
Section  Ten,  Town  39  North,  Range  14  East,  which,  as  the  Beau- 
bien  claim,  was  the  subject  of  litigation  lasting  until  1839,  when  a 
decision  adverse  to  Beaubien  was  given  by  the  court  of  last  resort. 


CHAPTER  II 
Chicago  in  Transition 

THE  platting-  of  Chicago  at  the  northern  terminus  of  the  Illinois 
and  Michigan  Canal  was  the  most  important  event  in  the  evo- 
lution of  the  metropolis.  It  was  the  beginning  of  the  modern  town. 
All  its  long  history  of  more  than  a  century  and  a  half  had  as  little  to 
do  with  its  future  as  had  the  unknown  story  of  the  Indians  and 
Mound  Builders,  whose  numberless  trails  led  to  the  great  Indian  vil- 
lages at  Bowmanville,  and  along  the  North  Branch  northward  to  the 
Skokie  marsh.  And  yet,  without  a  knowledge  of  what  was  happen- 
ing at  this  desolate  spot  in  the  wilderness  in  the  early  dawn  of  Chi- 
cago's day,  and  of  the  relation  of  these  trivial  incidents  to  the  story 
of  the  old  Northwest  Territory,  an  intelligent  comprehension  of 
Chicago  history  is  impossible. 

The  closing  decade  had  witnessed  an  unprecedented  migration 
from  the  older  states  into  the  rich  lands  of  the  West,  and  while  the 
numerical  increase  was  greater  in  Ohio  and  Indiana,  the  new  State 
of  Illinois  added  a  larger  percentage  to  its  population  than  either 
of  its  older  neighbors.  More  than  102,000  had  been  added  to  the 
55,211  who  were  counted  as  residents  of  the  State  in  1820,  but  nearly 
all  this  growth  was  in  the  central  and  southern  parts  of  the  State, 
the  only  county  north  of  Tazewell  and  Vermilion  to  show  any 
considerable  increase  being  Jo  Daviess  County,  which  contains 
Galena  and  the  lead-mining  district.  Much  of  the  northern  part  of 
the  State  was  still  a  wilderness,  occupied  by  Pottawatomies,  Sacs, 
Foxes,  Winnebagoes,  and  other  tribes  of  Indians,  and  only  three 
years  before  the  town  was  platted,  the  few  inhabitants  were  thrown 
into  a  panic  by  news  that  the  Winnebagoes  had  taken  the  war- 
path, and  by  the  fear  that  the  Pottawatomies,  who  were  numerous 
in  the  vicinity  of  the  settlement,  might  join  the  hostiles,  and  repeat 
the  horrors  of  the  massacre  in  1812.  News  of  the  outbreak  was 
brought  by  Governor  Cass  himself,  who  had  gone  to  Green  Bay  by 
appointment  to  hold  a  council  with  the  Winnebago  and  Menomenee 
tribes.  The  Indians  failed  to  appear,  and  learning  of  their  hostile 
purpose.  Governor  Cass  procured  a  birch-bark  canoe  and  a  crew  of 
men,  ascended  the  Fox  River  to  the  portage,  crossed  to  the  Wis- 
consin, and  made  all  possible  speed  down  the  Wisconsin  and 
Mississippi  to  Jefferson  Barracks  below  St.  Louis.  Here  he  per- 
suaded the  commanding  officer  to  charter  a  steamer  and  send  troops 
up  the  river  into  the  hostile  country.  Leaving  the  steamer  which 
had  brought  his  canoe  and  its  crew  at  the  mouth  of  the  Illinois, 

89 


90  HISTORY  OF  THE  BOARD  OF  TRADE 

Governor  Cass  reached  Chicago  by  way  of  that  river  and  the  Des 
Plaines,  and  the  Chicago  Portage.  He  remained  in  Chicago  only 
a  few  hours,  and  arrived  in  Green  Bay  via  the  western  shore  of 
Lake  Michigan,  having  made  the  round  trip  of  about  900  miles 
in  thirteen  days. 

There  had  been  no  garrison  in  Fort  Dearborn  since  1823,  and 
the  settlement  was  at  the  mercy  of  the  Pottawatomies,  who  were 
only  restrained  from  joining  in  the  revolt  by  the  good  offices  of 
Shawbonee  and  Billy  Caldwell,  two  Pottawatomie  chiefs  who  were 
friendly  to  the  whites.  At  the  solicitation  of  members  of  the  little 
community,  Gurdon  S.  Hubbard  went  to  the  settlements  in  Ver- 
milion County,  near  Danville,  aroused  the  militia,  and  on  the 
seventh  day  after  leaving  Fort  Dearborn  returned  with  a  hundred 
men  under  command  of  Achilles  Morgan,  an  old  Indian  fighter,  to 
the  great  joy  of  the  frightened  people  of  Chicago.  During  Hub- 
bard's absence,  John  B.  Beaubien  had  organized  a  motley  collection 
of  Canadian  half-breeds,  and  a  few  Americans,  into  the  first  militia 
company  raised  in  Chicago  since  the  massacre  in  1812. 

Happily  for  all  concerned,  news  was  received  shortly  after- 
wards that  the  Winnebagoes  had  concluded  a  treaty,  and  the 
"War"  was  over.  Nevertheless,  Fort  Dearborn  was  garrisoned 
in  the  following  year,  and  the  troops  remained  until  May  20, 
1831. 

The  following  table  gives  the  prices  realized  by  the  Canal 
Commissioners  for  some  of  the  lots  sold  in  the  Original  Town,  and 
the  names  of  the  purchasers : 

J.  B.  Beaubien,  lots  1  and  2,  block  17 $100.00 

Mark  Beaubien,  lots  3  and  4,  block  31 102.00 

William  Belcher,  lots  5  and  6,  block  29 109.00 

Wilson  A.  Bell,  lots  4  and  5,  block  34 48.00 

Lyon  Bourissa,  lots  1  and  2,  block  44 114.00 

Archibald  Clybourne,  lots  4  and  5,  block  5 42.00 

Charles  Dunn,  lot  1,  block  16 75.00 

John  Evans,  lot  5,  block  33 21.00 

Clement  A.  Finley,  lots  5  and  6,  block  31 101.00 

Thomas  Hartzell,  lot  1,  block  20 50.00 

John  S.  C.  Hogan,  lots  1,  2,  5  and  6,  block  — • 116.00 

Gurdon  S.  Hubbard,  lots  1  and  2,  block  19 75.00 

James  Kinzie,  lots  5,  6,  7  and  8,  block  — 76.00 

John  H.  Kinzie,  lot  2,  block  2 37.00 

David  McKee,  lot  7,  block  49 130.00 

Samuel  Miller,  lots  3,  4,  5  and  6,  block  14 110.00 

Alexander  Robinson,  lots  1  and  2,  block  29 138.00 

Alexander  Wolcott,  eight  lots  in  block  1,  also  east-half 
of  northeast  quarter.   Section  9,  Town  39,   Range 

14,  80  acres,  per  acre 1 .62>^ 


OF  THE  CITY  OF  CHICAGO  91 

Cook  County,  which  then  embraced  all  of  the  present  counties 
of  Cook,  Lake,  McHenry,  Will,  Dupage  and  Iroquois,  was  organ- 
ized in  March,  1831,  the  Act  of  the  General  Assembly  having  been 
approved  January  15,  1831,  and  on  the  8th  of  that  month  the 
County  Commissioners'  Court  was  opened,  and  Samuel  Miller, 
Gholson  Kircheval  and  James  Walker  sworn  in  as  Commissioners 
by  J.  S.  C.  Hogan,  Justice  of  the  Peace.  William  See  was  appointed 
Clerk,  and  Archibald  Clybourne,  County  Treasurer.  Cook  County 
was  divided  into  three  precincts,  the  Chicago,  the  Hickory  and  the 
Du  Page  precincts. 

In  the  following  month  a  special  session  of  the  County  Com- 
missioners was  held  to  provide  revenue  to  meet  the  expenses  of  the 
local  government,  and  licenses  were  granted  to  hotelkeepers,  mer- 
chants and  others. 

Among  the  resident  citizens  were:  Elijah  Wentworth  and 
family,  occupying  a  house  partly  log  and  partly  frame,  owned  by 
James  Kinzie,  on  the  west  side  of  the  river,  near  the  Fork.  Went- 
worth kept  a  tavern,  and  in  this  vicinity  resided,  with  their  families, 
James  Kinzie,  William  See,  Alexander  Robinson,  also  Robert  A. 
Kinzie,  who  had  a  stock  of  dry  goods,  groceries,  etc.,  mostly  for 
Indian  trade.  Across  the  North  Branch,  and  nearly  opposite  Went- 
worth's,  was  the  tavern  kept  by  Samuel  Miller,  whose  family 
resided  there,  and  with  him  his  brother,  John.  On  the  east  side  of 
the  South  Branch  and  immediately  above  the  Fork,  Mark  Beaubien 
and  family  lived  and  kept  a  tavern,  and  a  short  distance  above  him 
on  the  South  Branch,  an  Indian  trader  named  Bourissa  lived. 
There  were  no  houses  between  Mark  Beaubien's  tavern  and  Fort 
Dearborn,  except  a  small  log  cabin  near  the  foot  of  Dearborn 
Street,  used  as  an  Indian  trading  house.  Immediately  south  of  the 
Fort  was  J.  B.  Beaubien's  house  and  store;  and  still  farther  south 
an  unoccupied  house. 

On  the  north  side  of  the  river,  opposite  the  fort  was  the  old 
Kinzie  cabin,  unoccupied  and  much  dilapidated.  "Cobweb  Castle," 
which  had  been  the  residence  of  the  Indian  Agent,  was  unoccupied, 
Dr.  Wolcott  having  died  the  preceding  autumn.  It  stood  near  the 
present  corner  of  North  State  and  North  Water  Streets.  In  its 
vicinity  were  several  log  buildings,  one  of  them  occupied  by  the 
Agency  blacksmith,  McKee  (or  McGee),  and  one  by  Billy  Cald- 
well, the  half-breed  Pottawatomie  chief  who  was  then  interpreter 
for  the  agency.  The  Sub-Indian  Agent,  G.  Kercheval,  was  then 
here,  and  Dr.  E.  Harmon  and  James  Harrington  had  arrived  and 
were  making  claims  to  land  on  the  lake  shore  south  of  where  12th 
Street  is  now.     (Bross,  p.  17.) 

The  first  Post  Office  in  Chicago  was  established  in  1831,  and 
Jonathan  N.  Bailey,  who  was  then  living  in  the  old  Kinzie  house, 
was  appointed  postmaster.  It  is  believed  that  for  a  time  this  old 
house  was  the  Chicago  Post  Office.     A  mail  was  received  once  in 


92  HISTORY  OF  THE  BOARD  OF  TRADE 

two  weeks  from  Niles,  Michigan,  the  nearest  distributing  post 
office,  showing  a  great  increase  in  postal  business  since  1823,  when 
only  a  monthly  mail  reached  Fort  Dearborn  from  Fort  Wayne. 

Three  sailing  vessels  arrived  in  Chicago  during  the  year  1831,. 
viz. :  the  "Napoleon,"  which  transported  the  garrison  of  Fort  Dear- 
born to  Green  Bay ;  the  "Telegraph"  and  the  "Marengo."  (Andreas, 
Vol.  I,  p.   115.) 

The  act  of  the  General  Assembly  creating  the  County  of  Cook, 
made  the  town  laid  out  by  the  Canal  Commissioners,  the  County 
seat,  and  located  the  public  buildings  in  a  public  square  on  the 
south  side  of  the  river,  and  donated  this  square,  with  other  lands, 
to  the  new  county.  Section  13  of  the  Act  required  the  County  Com- 
missioners, "without  delay,"  to  establish  a  ferry  at  the  "seat  of 
justice,"  there  being  no  bridge  across  the  river.  Upon  filing  his 
bond  for  $200.00,  and  agreeing  to  ferry  all  citizens  of  Cook  County 
free,  Mark  Beaubien  was  authorized  to  exact  a  fee  from  outsiders. 

The  County  Commissioners  took  steps  during  the  summer  of 
1831  towards  the  establishment  of  two  country  roads,  intended  to 
open  communication  with  the  western  and  southern  parts  of  the 
county.  One  of  these  roads  was  to  run  from  the  town  of  Chicago 
"to  the  house  of  James  Walker  on  the  Du  Page  River,  and  so  on 
to  the  west  line  of  the  county."  The  other  was  to  run  "the  nearest 
and  best  way"  to  the  house  of  Widow  Brown  on  Hickory  Creek. 

In  September,  1831,  the  annual  payment  to  the  Indians  was 
made  in  Chicago,  and  about  four  thousand  of  them  gathered  on 
the  north  side  of  the  river  to  receive  the  annuities  which  were  dis- 
tributed by  the  Indian  Agent,  Colonel  T.  J.  V.  Owen,  the  successor 
of  Doctor  Wolcott.  Taking  advantage  of  the  disorder  which  always 
was  a  feature  of  similar  gatherings  of  Indians  when  liquor  was 
obtainable,  emissaries  from  Black  Hawk's  band  of  the  Sauks  (or 
Sacs),  were  present,  and  tried  to  incite  the  Pottawatomies,  Ottawas 
and  Chippewas  to  attack  the  settlements  on  Rock  River,  but  the 
influence  of  Chief  Billy  Caldwell  prevented  an  outbreak. 

A  few  men  who  afterwards  became  prominent  in  the  new  town, 
arrived  in  1831,  notably.  Colonel  R.  J.  Hamilton,  George  W.  Dole, 
and  P.  F.  W.  Peck,  and  towards  the  close  of  the  year  a  considerable 
immigration  set  in,  many  of  the  new  comers  passing  through  the 
little  settlement  to  points  further  west,  but  enough  remaining  to 
fill  the  abandoned  Fort  Dearborn  with  some  four  hundred  persons. 

Naperville  was  at  this  time  the  first  settlement  west  of  Chicago. 
A  number  of  settlers  who  had  come  to  Chicago  and  did  not  like  the 
appearance  of  the  place,  passed  on  to  "Napers."  The  town  of  Chi- 
cago continued  to  grow  in  1832,  and  its  growth  would  have  been 
more  rapid  but  for  two  untoward  incidents.  The  first  of  these  was 
the  Black  Hawk  war,  and  the  second  the  outbreak  of  cholera, 
brought  by  the  troops  which  arrived  on  the  steamer  Sheldon  Thomp- 
son, July  10,  1832,  under  command  of  General  Winfield  Scott,  to 


OF  THE  CITY  OF  CHICAGO  93 

suppress  the  insurrection  of  Black  Hawk's  band  of  Sacs.  Although 
unable  to  induce  the  Pottawatomies  to  join  in  a  campaign  against 
the  whites,  Black  Hawk,  who  had  been  trying  for  more  than  a  year 
to  re-enact  the  role  attempted  by  Pontiac  and  Tecumseh  many  years 
before,  and  who  had  visited  Maiden  in  the  hope  of  securing  aid  from 
the  British,  determined  to  force  the  issue,  and  contrary  to  the  wish 
of  Keokuk,  the  principal  chief  of  the  Sacs,  and  in  violation  of  the 
treaty  of  1804,  crossed  the  Mississippi  with  a  large  detachment  of 
the  Sac  tribe  in  the  early  part  of  1831.  The  settlers  were  alarmed, 
appealed  to  Governor  Reynolds  for  aid,  and  a  sufficient  show  of 
force  induced  Black  Hawk  to  retreat  to  the  west  shore  of  the 
Mississippi  again,  and  to  agree  to  relinquish  all  claim  to  lands  east 
of  the  Great  River,  and  it  was  supposed  that  the  trouble  was  set- 
tled. But  in  April,  1832,  probably  urged  by  scarcity  of  food,  and 
encouraged  by  his  emissaries  who  professed  to  have  received  assur- 
ances of  assistance  from  the  Winnebagoes,  Pottawatomies,  Chip- 
pewas  and  Ottawas,  Black  Hawk,  with  nearly  four  hundred  mounted 
warriors  and  their  women  and  children,  suddenly  appeared  on  the 
Rock  River,  under  pretense  of  going  to  their  friends,  the  Winne- 
bagoes, to  plant  corn.  Again,  the  border  was  in  a  panic,  the  militia 
was  called  out,  blunders  were  made,  and  the  settlers'  families 
throughout  northern  Illinois  fled  to  the  protection  of  the  forts. 
Chicago  was  filled  with  the  fugitives,  one  of  whom,  Rev.  S.  R. 
Beggs,  a  pioneer  Methodist  preacher,  at  Plainfield  on  the  Du  Page 
River,  northwest  of  Naperville,  thus  describes  their  sufferings : 

"There  was  no  extra  room  for  us  when  we  arrived  in  Chicago. 
Two  or  three  families  of  our  number  were  put  into  a  room  fifteen 
feet  square,  with  as  many  more  families,  and  here  we  stayed  crowd- 
ing and  jamming  each  other  for  several  days.  *  *  *  T^\iq  next 
morning  our  first  babe  was  born,  and  during  our  stay  fifteen  tender 
infants  were  added  to  our  number.  One  may  imagine  the  confusion 
of  the  scene.  Children  were  crying  and  women  were  complaining 
within  doors,  while  without  the  tramp  of  soldiers,  the  rolling  of 
drums,  and  the  roar  of  cannon,  added  to  the  din." 

On  the  1st  of  July,  Gen.  Winfield  Scott,  with  nine  companies 
of  regulars,  including  a  company  of  West  Point  cadets,  arrived  at 
Detroit,  where  two  men  on  board  his  transports  were  taken  ill  with 
Asiatic  cholera,  and  died  in  a  few  hours  in  spite  of  all  that  physicians 
could  do  for  them.  They  were  the  first  victims  of  the  dreaded  dis- 
ease on  the  Upper  Lakes.  At  Fort  Gratiot,  near  the  outlet  of  Port 
Huron,  General  Scott  left  the  cadets  and  280  of  his  men,  nearly  all 
of  whom  died  of  cholera,  while  with  the  remainder  of  his  force  he 
proceeded  to  Chicago  on  the  steamer  Sheldon  Thompson.  Thirty 
men  died  before  the  steamer  reached  its  destination,  and  were 
dropped  into  the  lake.  General  Scott  arrived  on  the  8th  of  July, 
took  possession  of  the  fort,  and  soon  the  soldiers  began  to  die  of 
■cholera ;  and  before  the  disease  was  checked  ninety  of  them  had  been 


94         HISTORY  OF  THE  BOARD  OF  TRADE 

buried  in  the  sands  near  the  foot  of  Madison  Street.  The  people  who 
had  fled  from  the  horrors  of  Indian  warfare  were  in  still  greater 
terror  of  the  plague,  and  nearly  all  of  them  forsook  the  town,  while 
for  the  garrison  there  was  no  escape.  There  were  hardly  enough 
well  men  to  bury  the  dead  who  were  deposited  in  the  earth  without 
the  military  honors  of  a  soldier,  or  even  the  civil  usage  of  a  coffin. 

On  the  20th  of  July,  General  Scott  moved  his  command  to  the 
Desplaines  River,  and  encamped  where  Riverside  is  now.  Leaving 
the  main  body  of  his  troops  under  command  of  Colonel  Cummings, 
with  orders  to  follow  as  soon  as  the  health  of  the  soldiers  would 
permit,  General  Scott,  with  twelve  men  and  two  baggage  wagons, 
started  for  the  front,  and  soon  received  news  of  the  battle  of  Bad 
Axe,  and  the  surrender  of  Black  Hawk  and  the  remnant  of  his  band, 
which  ended  forever  the  long  Indian  warfare  east  of  the  Mississippi 
River. 

On  the  25th  of  April,  1832,  the  first  street  leading  to  the  lake 
was  laid  out.  It  commenced  at  the  intersection  of  State  Street  and 
South  Water  Street,  and  ran  across  the  Government  Reservation  to 
Lake  Michigan,  the  distance  being  18  chains  and  50  links.  Early 
in  the  year  the  Road  Commissioners  reported  that  they  had  sur- 
veyed a  road  from  Chicago  to  the  Wabash  River,  opposite  Vincennes. 
On  the  4th  of  April  the  Sheriff  returned  the  total  tax-list  of  the 
county  at  $148.29,  and  reported  that  there  was  $10.50  delinquent. 
The  County  Treasurer  reported  $225.50  received  from  licenses,  less 
$88.50  delinquent,  the  amount  paid  out  on  county  orders  $252.35, 
balance  in  hand  $15.93.    (Colbert,  p.  6.) 

In  the  fall  of  the  year  1832.  P.  F.  W.  Peck  erected  a  frame  build- 
ing on  the  southeast  corner  of  South  Water  and  La  Salle  Streets, 
the  lumber  being  hauled  from  Plainfield,  in  Will  County;  and 
George  W.  Dole  put  up  a  small  log  building  on  the  southeast  corner 
of  Dearborn  and  South  Water  Streets,  in  the  rear  of  which,  towards 
the  close  of  the  year  1832,  he  began  the  packing  industry  in  Chi- 
cago, slaughtering  200  cattle  and  packing  350  hogs  for  the  eastern 
market.     (Colbert,  p.  6.) 

In  August,  1832,  the  first  Sunday  School  was  organized  by 
Philo  Carpenter  and  Captain  Johnson,  with  thirteen  pupils,  religious 
services  having  been  held  in  the  preceding  winter,  conducted  by 
Mark  Noble,  whose  wife  and  daughter  were  members  of  the  Meth- 
odist Episcopal  Church.  Notwithstanding  the  war  and  the  out- 
break of  cholera,  about  one  hundred  and  fifty  frame  houses  were 
built  during  the  year  1832. 

In  the  spring  of  1833,  Congress  made  an  appropriation  of  $30,- 
000.00  for  the  improvement  of  the  harbor,  and  the  work  was  greatly 
facilitated  by  a  freshet  in  the  river  in  the  following  spring,  washing 
away  the  sand  between  the  piers  and  opening  a  channel  across  the 
sand  bar  which  had  obstructed  the  natural  outlet  of  the  river  ever 
since  the  American  occupation  of  the  country,  at  least. 


OF  THE  CITY  OF  CHICAGO  95 

John  S.  C.  Hogan,  who  received  the  appointment  of  post  mas- 
ter in  1833,  opened  the  post  office  in  a  small  store  on  South  Water 
Street,  and  in  recognition  of  the  growing  importance  of  Chicago, 
the  people  now  received  mail  once  a  week,  the  messenger  bringing 
the  mail  bag  on  horseback  from  Niles.  Not  satisfied  even  with  this 
great  increase  in  postal  faciHties,  a  public  meeting  held  in  the  fol- 
lowing January,  forwarded  to  the  Postmaster  General  a  request 
for  additional  mails. 

The  first  newspaper  ever  published  in  northern  Illinois,  the 
"Chicago  Democrat,"  John  Calhoun,  editor,  was  issued  Novem- 
ber 26,  1833,  and  in  its  first  number  the  editor  strongly  urged 
prosecution  of  work  on  the  Illinois  and  Michigan  Canal,  which  was 
no  further  along  than  before  the  town  was  laid  out  in  1830. 

Four  churches  were  organized  during  the  year  1833,  viz.,  the 
First  Presbyterian,  the  First  Baptist,  St.  Mary's  Catholic,  and  a 
Methodist  church. 

But  the  two  memorable  events  in  Chicago  history  in  1833  were 
the  incorporation  of  the  Village  of  Chicago,  which  was  decided  upon 
at  a  public  meeting  held  August  5,  1833;  and  the  treaty  with  the 
Pottawatomie  Indians,  who  ceded  to  the  United  States  all  their 
lands  in  Wisconsin  and  northern  Illinois,  amounting  to  about  twenty 
million  acres,  for  which  they  were  to  receive  $1,100,000.00  during 
twenty-five  years.  Seven  thousand  of  these  Indians  assembled  at 
Chicago  on  the  26th  of  September,  their  chiefs  meeting  the  Govern- 
ment Commissioners  in  a  large  tent  on  the  north  side  of  the  river, 
where  the  council  was  held.  The  first  payment  to  the  Indians  was 
$56,000.00  in  cash  and  $130,000.00  in  goods,  and  was  followed  by  the 
debauch  customary  upon  such  occasions. 

The  first  election  of  officers  of  the  newly  incorporated  village 
was  held  August  10th  at  the  house  of  Mark  Beaubien,  and  as  it  is 
probable  that  every  voter  in  the  place  cast  his  ballot,  the  names  are 
here  given.  Voters :  E.  S.  Kimberly,  J.  B.  Beaubien,  Mark  Beau- 
bien, T.  J.  V.  Owen,  William  Ninson,  Hiram  Pearsons,  Philo  Car- 
penter, George  Chapman,  John  W.  Wright,  John  T.  Temple,  Mathias 
Smith,  David  Carver,  James  Kinzie,  Charles  Taylor,  J.  S.  C.  Hogan, 
Eli  A.  Rider,  Dexter  J.  Hapgood,  George  W.  Snow,  Madore  B. 
Beaubien,  Gholson  Kercheval,  George  W.  Dole,  R.  J.  Hamilton, 
Stephen  F.  Gale,  Enoch  Darling,  W.  H.  Adams,  C.  A.  Ballard,  John 
Watkins,  James  Gilbert. 

Trustees  were  elected  and  they  organized  by  electing  T.  J.  V. 
Owen  president.  They  extended  the  limits  of  the  village  to  Jackson 
Street  on  the  south,  Ohio  Street  on  the  north,  and  made  Jefiferson 
and  Cook  Streets  the  western  boundaries.  On  the  north  side  they 
extended  the  eastern  boundary  to  the  lake.  A  new  ferry  at  Dear- 
born Street  was  ordered  at  the  session  of  September  3,  1833. 

Some  bridges  of  rough  wood  appear  to  have  been  made  across 
the  river  by  this  time,  because  on  the  7th  of  November  the  Board 


96  HISTORY  OF  THE  BOARD  OF  TRADE 

of  Trustees  by  ordinance  forbade  the  stealing  "of  timber  from  the 
bridges  for  firewood  or  other  purposes."  Citizens  were  further 
forbidden  to  let  pigs  wander  in  the  streets,  "to  shoot  off  any  fire- 
arms," to  endanger  the  public  safety  by  pushing  a  red  hot  stove 
pipe  through  the  board  wall,  to  run  a  race  horse  through  the 
principal  streets,  to  exhibit  a  stallion  without  due  consideration 
for  public  decency,  to  leave  lumber  lying  loose  in  the  streets,  or  to 
throw  dead  animals  into  the  river. 

The  Water  Streets  being  at  this  time  on  the  banks  of  the  river, 
owners  were  permitted  by  the  trustees  to  use  all  but  eighty  feet 
of  the  street  for  wharfing  privileges,  the  plan  adopted  by  some  of 
the  river  towns  of  leaving  a  levee  for  the  use  of  shallow  boats  not 
being  practicable  for  such  vessels  as  were  required  in  lake 
navigation. 

Chicago  grew  rapidly  in  1833,  and  on  April  30,  1834,  the 
"Democrat"  remarked  that  emigration  had  fairly  commenced,  as 
more  than  a  hundred  had  arrived  by  boats  and  otherwise  within 
the  last  ten  days.  On  the  4th  of  June  the  same  paper  announced 
that  "arrangements  have  been  made  by  the  proprietors  of  the 
steamboats  on  Lake  Erie  whereby  Chicago  is  to  be  visited  by  a 
steamboat  once  a  week  till  the  25th  of  August."  Another  memo- 
rable event  was  the  entrance  of  the  schooner  "Illinois"  to  the  Chi- 
cago River  under  sail  on  Saturday,  July  11,  1834.  Prior  to  this, 
vessels  were  obliged  to  anchor  outside  the  bar  and  receive  and 
discharge  their  cargoes  by  scows  or  lighters.  But  during  the  pre- 
vious spring  a  great  freshet  had  completed  the  cutting  of  a  channel 
through  the  bar,  as  before  related,  and  this  schooner  "Illinois," 
of  about  100  tons,  being  the  first  to  come  up  the  river  under  sail, 
created  a  great  sensation. 

In  the  latter  part  of  October,  1833,  section  16,  known  as  the 
School  Section,  was  sold  at  auction  by  Commissioner  R.  J.  Hamilton. 
Its  boundaries  are  State,  Madison,  Halsted  and  Twelfth  Streets. 
The  whole  section,  except  four  lots,  brought  an  average  of  about 
$67.20  per  acre,  and  purchasers  were  allowed  to  pay  in  one,  two 
and  three  years,  interest  being  charged  them  at  10  per  cent  per 
annum.  Before  many  months  a  wild  speculation  was  begun  in 
these  and  other  lands,  which  did  not  run  its  course  until  the  panic 
of  1837  involved  in  hopeless  ruin  the  speculators  who  did  not  own 
their  lands  free  of  all  incumbrance. 

There  were  censors  in  those  days,  and  in  February,  1834,  the 
Board  imposed  upon  the  president  the  duty  of  seeing  that  no 
immoral  show  was  permitted  in  the  village,  those  showmen  who 
were  approved  by  the  censor  to  pay  ten  dollars  for  the  privilege 
of  exhibiting.  July  11,  1834,  the  city  surveyor  was  ordered  to 
grade  South  Water  Street  so  that  the  water  should  flow  into  the 
river  from  each  cross  street. 

In  August,   1834,  a  drawbridge  across  the  Chicago  River  at 


OF  THE  CITY  OF  CHICAGO  97 

Dearborn  Street  was  accepted  by  the  Board  of  Trustees,  and  in  the 
following  month  the  first  Sunday-closing  law  was  passed  by  the 
Board,  requiring  every  tippling  shop  or  grocery  to  be  closed  on 
the  Sabbath,  under  penalty  of  $5.00  fine.  "On  the  2d  of  October 
the  Board  of  Trustees  deliberately  resolved  to  borrow  sixty  dollars 
for  the  purpose  of  opening  and  improving  streets,  with  the  careful 
provision,  however,  that  the  money  should  be  paid  back  as  soon 
as  it  could  be  raised  by  taxation." 

Among  the  earliest  visitors  to  Chicago  who  had  the  literary 
capacity  to  record  his  impressions  of  the  new  town  in  attractive 
guise  was  Charles  Fenno  Hoffman,  of  New  York,  who  made  a  jour- 
ney on  horseback  from  the  East  in  1833,  and  wrote  from  Chicago  a 
number  of  letters  to  the  "American  Monthly,"  which  were  collected 
and  published  in  1835  under  the  title  "A  Winter  in  the  West."  In 
the  first  of  these  letters,  dated  January  1,  1834,  he  speaks  of  the 
population  having  quintupled  during  the  preceding  summer,  and 
ten  days  later  he  writes  of  Chicago:  "As  a  place  of  business,  its 
situation  at  the  central  head  of  the  Mississippi  Valley  will  make 
it  the  New  Orleans  of  the  North."  A  few  days  later  a  friend  invited 
him  to  ride  behind  one  of  the  fast  horses  which  during  a  trotting 
race  on  the  river  started  a  prairie  wolf  from  his  lair.  This  suggested 
a  wolf  hunt  on  horseback,  in  which  Mr.  Hoffman  joined  with  great 
delight. 

Another  literary  visitor  in  these  early  days  was  Harriet  Marti- 
neau,  the  English  authoress,  who  writes:  "I  never  saw  a  busier 
place  than  Chicago  was  at  the  time  of  our  arrival.  The  streets  were 
crowded  with  land  speculators  hurrying  from  one  sale  to  another. 
*  *  *  It  seemed  as  if  some  prevalent  mania  infected  the  whole 
people."  A  little  later  she  gives  an  incident  which,  if  at  all  common, 
explains  this  mania.  She  says :  "A  poor  man  at  Chicago  had  a  pre- 
emption right  to  some  land,  for  which  he  paid  in  the  morning  one 
hundred  and  fifty  dollars.  In  the  afternoon  he  sold  it  to  a  friend 
of  mine  for  five  thousand  dollars." 

John  Wentworth,  "Long  John,"  as  he  was  affectionately  called, 
who  came  to  Chicago  in  1834,  gives  an  account  of  a  wedding  per- 
formed by  Rev.  Isaac  W.  Hallam,  pastor  of  St.  James  Episcopal 
Church,  the  bride  being  the  daughter  of  one  of  the  half-breed  Indian 
chiefs,  and  the  groom  a  clerk  in  the  postoffice.  He  says :  "The 
company  was  made  up  in  about  equal  numbers  of  Indians,  half- 
breeds,  Canadian  French,  and  Americans.  *  *  *  It  was  the  first 
time  I  ever  saw  the  Indian  war  dance.  Some  of  the  guests  not  only 
had  their  tomahawks  and  scalping  knives,  bows  and  arrows,  but  a 
few  of  them  had  real  scalps  which  they  pretended  they  had  taken 
in  the  various  Indian  wars." 

On  the  11th  of  February,  1835,  an  Act  of  the  Legislature  was 
approved  whereby  "all  east  of  State  Street  from  Twelfth  Street  to 
Chicago  Avenue  was  included  within  the  town  limits,  except  that 


98  HISTORY  OF  THE  BOARD  OF  TRADE 

it  was  provided  that  the  part  lying  between  Madison  Street  and 
the  river  should  not  belong  to  the  town  till  vacated  by  the  United 
States." 

It  was  during  the  following  summer  that  the  Board  of  Trus- 
tees adopted  an  enlarged  code  of  municipal  laws,  one  of  which 
forbade  under  penalty  of  $25.00  the  stacking  of  hay  in  the  district 
bounded  by  Washington,  Canal,  Kinzie,  Wolcott  (now  North  State), 
Illinois  Streets  and  Lake  Michigan.  In  the  autumn  of  1835  the 
Board  passed  an  ordinance  concerning  a  fire  department,  thirty- 
nine  sections  being  required  to  include  the  necessary  provisions. 
The  purchase  of  two  fire  engines  had  already  been  authorized,  and 
when  an  alarm  of  fire  was  heard  every  able-bodied  male  inhabitant 
was  required  to  "repair  to  the  place  of  the  fire  with  his  fire  bucket 
or  buckets"  and  there  obey  the  orders  of  the  proper  officials,  under 
penalty  of  $5.00  fine.  Wharfing  privileges  for  999  years  on  the 
Water  Streets  were  ofifered  for  sale  November  14,  1835,  the  Board 
of  Trustees  agreeing  to  dredge  the  river  to  the  depth  of  ten  feet ; 
but  four  days  later  the  trustees  decided  not  to  bind  themselves  to 
dredge  the  river  on  North  Water  Street,  and  therefore  reduced  the 
prices  to  be  paid  for  the  wharfing  privileges  on  the  north  side 
nearly  one-half,  and  fixed  the  minimum  price  on  North  Water  Street 
at  $8.50  to  $15.00  per  front  foot. 

Before  the  year  closed  the  first  fire  engine  was  bought  of  Hub- 
bard &  Co.,  Engine  Company  No.  1  was  organized,  and  on  the 
23d  of  December,  1835,  it  was  reported  that  S.  G.  Trowbridge  had 
been  elected  foreman.  A  contract  was  let  to  Levi  Black  on  the 
30th  of  December  for  the  building  of  an  engine  house  on  La  Salle 
Street  near  the  center  of  the  public  square,  for  which  he  was  to 
be  paid  $220.00. 

Two  hundred  and  eleven  votes  were  cast  at  the  election  held 
July  10,  1835,  when  nine  trustees  were  chosen.  The  trustees  organ- 
ized by  electing  Hiram  Hugunin  president,  and  A.  N.  Fullerton 
was  appointed  clerk  of  the  Board.  A  public  meeting  was  called 
in  September  to  take  the  sense  of  the  citizens  as  to  petitioning 
Congress  for  the  United  States  reservation.  Apparently  no  action 
was  taken,  and  on  the  28th  of  October  another  call  was  issued. 

Such  buildings  as  had  been  erected  prior  to  this  time  appear 
to  have  been  built  with  little  regard  to  street  lines,  and  the  trustees 
began  the  year  1836  by  ordering  the  constable,  at  their  meeting 
of  the  6th  of  January,  to  remove  all  buildings  from  the  public 
streets.  On  the  4th  of  June  the  street  commissioner  was  ordered 
"to  construct  plank  sluices  across  Clark  Street  to  carry  drainage 
to  the  South  Branch."  (Colbert,  p.  13.)  Other  street  improve- 
ments were  ordered  in  the  following  month,  when  it  was  resolved 
that  Canal  Street  as  far  north  as  Kinzie,  Lake  Street  as  far  west 
as  Desplaines,  and  Randolph  Street  from  the  river  to  Halsted  Street 
should  be  turnpiked.     In  July  the  Board  determined  to  borrow  a 


OF  THE  CITY  OF  CHICAGO  99 

large  sum  for  public  improvements,  but  upon  applying  to  the  State 
Bank  for  a  loan  of  $25,000  they  were  refused  the  desired  accom- 
modation. Thereupon,  on  the  5th  of  August,  Mr.  William  B.  Ogden 
was  empowered,  as  agent  of  the  corporation,  to  borrow  the  money 
elsewhere.  The  first  sale  of  lots  for  delinquent  taxes  was  ordered 
September  26,  1836. 

On  the  25th  of  November  a  meeting  of  the  citizens,  called  by 
authority  of  the  Board  of  Trustees  to  consider  the  expediency  of 
applying  for  a  city  charter,  resolved  upon  such  action  and  appointed 
a  committee  to  prepare  a  petition  to  the  Legislature  and  to  draft  a 
suitable  charter  to  accompany  the  same. 

The  Legislature  having  passed  "An  Act  to  Incorporate  the 
City  of  Chicago,"  the  Board  of  Trustees  at  their  meeting  on  March 
31st,  1837,  ordered  an  election  for  officers  under  the  new  charter, 
to  be  held  on  the  first  Tuesday  in  May.  This  election  resulted  in 
the  choice  of  William  B.  Ogden  for  mayor.  The  entire  corporation 
tax  on  real  estate  in  Chicago  in  1836  was  $8,998.28. 

Five  Years  of  Depression 

The  new  city  with  a  population  of  4,170  (July,  1837),  was 
fairly  launched  upon  the  wonderful  career,  of  which  its  rapid  growth 
during  the  years  of  transition  from  a  frontier  post  among  the  Indians 
to  a  modern  town,  was  only  an  earnest.  The  Pottawatomies,  about 
five  thousand  in  number,  had  received  their  last  payment  in  Chicago 
in  the  summer  of  1835,  had  danced  their  war-dance  in  its  streets 
for  the  last  time,  and  marched  away  to  their  reservation  in  north- 
western Missouri.  Reveille  had  sounded  for  the  last  time  at  Fort 
Dearborn,  the  garrison  had  saluted  the  colors,  evacuated  the  Post 
under  orders  to  proceed  to  Fort  Howard  on  Green  Bay,  and  the 
military  occupation  of  the  city,  a  constant  reminder  of  the  danger 
of  Indian  warfare,  ceased  December  29th,  1836.  The  little  Indian 
hamlet  which  was  in  1829,  almost  precisely  what  it  was  when  Hub- 
bard first  saw  it  in  1818,  and  differed  little  from  the  "Checago"  of 
Joliet  and  La  Salle  a  century  and  a  half  earlier,  had  been  transformed 
in  eight  years  into  a  modern  city  by  the  mere  promise  that  the 
"Illinois  and  Michigan  Canal"  would  some  day  reach  the  waters 
of  Lake  Michigan  within  its  limits.  But  despite  Acts  of  the  Legis- 
lature, the  organization  of  canal  companies,  the  prosecution  of  sur- 
veys, and  a  clear  perception  of  the  inestimable  value  of  this  proposed 
canal  to  the  people  of  Chicago,  actual  work  was  not  commenced 
upon  it  until  July  4th,  1836,  just  eight  months  before  the  Legislature 
passed  the  Act  incorporating  the  city.  None  of  the  enthusiasts, 
either  in  Chicago  or  in  the  interior  of  the  State,  who  favored  the 
canal,  had  money  of  their  own  to  put  into  the  enterprise,  and  they 
could  not  persuade  those  in  the  east  who  had  capital,  to  risk  it  for 
their  benefit.  The  disgraceful  record  of  financial  legislation  in 
Illinois,   and   the   threats   of   repudiation   in    the    early   30s,   easily 


100  HISTORY  OF  THE  BOARD  OF  TRADE 

accounted  for  the  disinclination  of  capitalists  to  lend  money  upon  an 
enterprise,  however  valuable  ultimately,  which  could  by  no  possi- 
bility pay  dividends  until  a  larger  population  should  have  occupied 
the  portion  of  the  State  tributary  to  the  canal.  The  enthusiasm  of 
the  early  "boomers"  caused  them  to  overlook  this  vital  necessity  of 
an  adequate  population  in  the  interior,  and  when  they  did  realize 
it,  they  hoped  by  encouraging  "cheap  money"  to  maintain  prices 
of  their  lands  and  town  lots,  until  the  growth  of  the  country  should 
warrant  current  values.  Following  the  loss  of  $150,000.00,  which 
the  State  incurred  by  its  excursion  into  the  field  of  wildcat  banking, 
and  the  final  winding  up  of  the  State  bank,  for  which  it  had  stood 
sponsor,  in  1831,  and  the  disappearance  of  specie  from  circulation, 
the  want  of  a  circulating  medium  was  keenly  felt.  Remoteness 
of  the  place  of  redemption  was  as  great  a  recommendation  for  a  bill 
as  solvency  of  the  bank  issuing  it ;  and  "the  Bank  of  Green  Bay, 
working  under  a  charter  from  the  Michigan  Territorial  Legislature, 
and  other  banks,  sufficiently  remote  for  'safety,'  helped  to  swell  the 
volume  of  currency,  and  buoy  up  the  inflated  trade  of  the  times." 
Any  bill  was  "good"  as  long  as  the  Chicago  Branch  of  the  new  State 
Bank,  established  December  5th,  1835,  would  accept  it  on  deposit. 

On  the  11th  of  July,  1836,  the  United  States  Treasurer  issued  a 
circular  requiring  collectors  of  the  public  revenue  to  accept  only 
gold  and  silver  in  payment  for  the  public  lands.  The  great  real 
estate  speculation  was  then  near  its  culmination,  and  it  is  a  fair  pre- 
sumption that  the  sentiment  in  favor  of  a  gigantic  system  of  public 
improvements,  "commensurate  with  the  wants  of  the  people"  as 
the  resolutions  described  it,  had  its  origin  in  the  financial  needs  of 
some  shrewd  speculators.  During  the  summer  and  fall,  public 
meetings  were  held  in  many  towns  in  the  State,  resolutions  passed 
favoring  the  completion  of  the  Canal,  the  building  of  railroads,  the 
improvement  of  river  navigation,  and  delegates  were  appointed  to 
an  internal  Improvement  Convention  to  meet  at  the  Capital  at  the 
same  time  the  Legislature  was  to  meet.  Urged  by  the  convention, 
the  Legislature,  on  February  27th,  1837,  five  days  before  the  pass- 
age of  the  Act  incorporating  the  City  of  Chicago,  passed  a  bill 
appropriating  $400,000.00  for  improvement  of  several  rivers  of  the 
State  and  $9,650,000.00  to  build  1,341  miles  of  railroad.  Of  the 
amount  appropriated  for  building  railroads  $3,500,000.00  was  appor- 
tioned to  the  main  line  of  the  Illinois  Central  Railroad  from  Cairo 
to  Galena,  which  had  been  incorporated  January  18th,  1836,  two 
days  after  the  incorporation  of  the  Galena  and  Chicago  Union 
Railroad. 

When  the  City  was  granted  its  charter  in  March,  1837,  it  must 
have  appeared  to  the  enthusiastic  citizens  that  their  hopes  were  near 
fruition.  Work  had  actually  begun  upon  the  long  deferred  Canal, 
and  the  State  of  Illinois  was  pledged  to  pay  the  bonds  which  were 
offered  for  sale  to  defray  the  cost  of  this  great  public  work.     Like 


OF  THE  CITY  OF  CHICAGO  101 

the  town  of  Chicago,  the  proposed  Canal  had  grown  from  the  little 
ditch  at  first  suggested  of  sufficient  size  to  admit  the  passage  of 
boats  13}4  feet  wide  and  drawing  three  feet  of  water,  to  a  real  com- 
mercial waterway  60  feet  wide  at  the  surface,  36  feet  wide  on  the 
base,  and  six  feet  in  depth,  and  the  estimated  cost  had  increased 
correspondingly  from  about  $700,000.00  in  1825  to  $8,654,000.00  in 
1837.  The  population  of  Chicago  had  increased  forty  or  fifty-fold 
in  eight  years ;  a  demand  for  actual  improvement  and  occupation, 
assisted  by  speculative  excitement,  had  advanced  prices  of  real 
estate  in  many  cases  in  far  greater  ratio.  But  after  all,  the  most 
significant  thing  was  the  changed  commercial  character  of  the  com- 
munity. In  1829  as  in  1803,  the  country  tributary  to  Chicago  pro- 
duced nothing  which  could  be  exchanged  for  the  manufactured 
goods  necessary  to  the  comfort  of  civilized  people  and  the  mainte- 
nance of  a  civilized  town.  The  profitable  fur  trade  of  the  French 
and  English  periods  was  ruined  when  game  became  scarce,  and  the 
Indians  followed  the  bufifalo  beyond  the  Mississippi.  As  before 
stated,  there  were  in  1830  few  settlers  in  the  State  of  Illinois  north 
of  Vermilion  and  Tazewell  Counties,  except  in  the  lead  mining 
region  of  which  Galena  was  the  center.  But  two  years  later,  when 
Black  Hawk  had  been  captured  and  his  band  destroyed  or  driven 
beyond  the  Great  River,  rapid  settlement  of  farms  in  northern  Illi- 
nois began,  and  soon  thereafter  produce  from  these  farms  found  a 
market  in  Chicago. 

The  beef  and  pork  packed  by  George  W.  Dole  in  the  fall  of 
1832  and  shipped  to  Detroit  and  New  York  (Colbert,  p.  45),  to  which 
reference  has  already  been  made,  was  the  first  commercial  export 
from  Chicago,  of  Illinois  produce,  so  far  as  known.  Prior  to  this 
time  Chicago  never  had  anything  to  forward  by  lake,  except  furs 
and  peltry.  Every  vessel  that  arrived  from  the  east  brought  provi- 
sions, flour,  pork,  beef  and  other  farm  products,  but  took  no  return 
cargo  worth  mentioning.  Not  until  after  the  City  was  incorporated 
did  the  production  of  Northern  Illinois  farms  overtake  the  consump- 
tive demand  of  the  new  settlers  who  were  arriving  in  constantly 
increasing  numbers. 

In  its  early  years  the  trade  of  Chicago  was  hampered  by  serious 
natural  obstacles,  both  on  land  and  water.  There  was  no  harbor 
until  1834,  and  such  roads  as  led  into  the  country  were  almost 
impassable  for  heavy  teams  except  in  very  dry  summers,  or  in  win- 
ters of  extreme  cold.  Live  stock  could  be  driven  in  more  easily 
than  grain  or  other  produce  could  be  hauled  on  wheels,  and  so  it  may 
be  asserted  that  outside  a  radius  of  fifty  miles,  it  was  economically 
impracticable  to  haul  grain  to  Chicago  during  the  early  years  of 
its  existence  as  a  town.  The  morass  which  in  wet  weather  extended 
westward  from  the  lake  to  the  ridge  upon  which  Oak  Park  now 
stands,  and  south-westward  to  the  present  site  of  La  Grange,  greatly 
restricted  the  distribution  of  merchandise  from  Chicago,  as  well 


102  HISTORY  OF  THE  BOARD  OF  TRADE 

as  the  receipt  of  produce  from  the  interior.  But  in  spite  of  all  dis- 
advantages, the  people  showed  during  this  period  of  transition, 
commendable  foresight,  not  only  as  merchants,  but  as  manufac- 
turers. The  following  is  a  partial  list  of  the  pioneer  enterprises 
which  had  been  undertaken  along  modern  lines  before  the  City  was 
incorporated : 

First  "merchant"  (except  Indian  traders),  Geo.  W.  Dole,  1831; 
first  tannery,  built  by  John  Miller,  1831 ;  first  meat  packing  busi- 
ness begun  by  Geo.  W.  Dole,  1832 ;  first  frame  building  for  busi- 
ness by  P.  F.  W.  Peck,  or  Geo.  W.  Dole,  1832;  first  saw  mill  was 
built  1832;  first  shipment  of  Western  produce  from  Chicago  (except 
furs  and  pelts),  by  Newberry  &  Dole,  1833;  first  agricultural  imple- 
ments were  manufactured  by  Asabel  Pierce,  1833 ;  first  newspaper, 
"Chicago  Democrat,"  issued  Nov.  26,  1833;  first  lumber  merchant 
was  David  Carver,  1833 ;  first  brick  yard,  established  by  T.  K.  Blod- 
gett,  1833 ;  first  brick  house,  built  for  John  Noble,  1833 ;  first  soap 
and  candle  works  by  Elston  &  Woodrufif,  1833;  first  large  brick 
buildnig  by  Gurdon  S.  Hubbard,  1834;  first  carriage  factory  by 
Briggs  &  Humphrey,  1834;  first  book  store  by  Russell  &  Clift,  1834; 
first  bank  (branch  of  the  State  Bank),  opened  1835;  Government 
land  office  opened  1835 ;  first  iron  foundry  by  Jones,  King  &  Co., 
1835  ;  first  shipyard  by  Nelson  R.  Norton,  1835  ;  first  railroad,  Galena 
and  Chicago  Union  Railroad,  chartered  1836;  first  water  works  com- 
pany (The  Chicago  Hydraulic  Compnay),  incorporated  1836;  first 
flouring  mill  by  Gage  &  Lyman,  in  1836;  first  sailing  vessel  (the 
sloop  Clarissa),  launched  in  May,  1836. 

Apparently  the  country  never  was  more  prosperous  than  when 
the  year  1837  began.  The  last  year  of  General  Jackson's  stormy  term 
as  President  was  near  its  close.  His  vindictive  warfare  upon  the 
Bank  of  the  United  States  had  prevented  an  extension  of  its  charter, 
the  Secretary  of  the  Treasury  having,  by  his  direction,  withdrawn 
the  government  funds  on  October  1,  1833,  and  deposited  them  in 
certain  State  banks  whose  management  was  friendly  to  the  ad- 
ministration. The  business  of  the  country  suffered  much  embar- 
rassment from  these  measures,  but  the  State  banks  soon  emitted 
a  flood  of  bills,  and  until  their  worth  was  inquired  into,  they  an- 
swered the  purpose  of  currency,  and  certainly  contributed  to  the 
speculative  mania  which  attacked  all  parts  of  the  Union,  and  es- 
pecially the  newer  States  of  the  West  and  South,  where  the  public 
lands  were  situated.  Between  1829  and  1837  the  number  of  banks 
in  the  United  States  more  than  doubled,  their  capital  increased 
two  and  a  half  times,  and  their  circulation  more  than  threefold. 
(Dewey,  p.  225.) 

The  sales  of  public  lands  amounted  to  nearly  five  million  dollars 
in  1834,  eleven  million  dollars  in  1835  and  nearly  $25,000,000  in 
1836.  (Von  Hoist,  vol.  2,  p.  179.)  President  Jackson  was  able 
to  announce  in  his  message  to  Congress  in  December,   1834,  that 


OF  THE  CITY  OF  CHICAGO  103 

the  national  debt  had  been  extinguished ;  and  in  June,  1836,  Con- 
gress passed  an  Act  to  distribute  among  the  States  all  the  surplus 
funds  which  should  be  found  in  the  Treasury  on  the  1st  of  January, 
1837,  except  the  sum  of  five  million  dollars,  which  was  to  be  re- 
tained as  a  working  balance.  The  distribution,  or  "deposit"  as 
the  Act  reads,  was  to  be  made  in  four  quarterly  payments,  begin- 
ning January  1,  1837. 

It  is  easy  now  to  see  the  causes  of  the  financial  tornado  which 
was  rapidly  approaching  and  which  for  a  time  put  a  stop  to  the 
progress  of  Chicago. 

While  the  removal  of  the  government  deposits  from  the  Bank 
of  the  United  States  in  1833  was  of  less  importance  than  the  parti- 
sans of  the  bank  attributed  to  it,  still  the  amount  of  these  deposits 
was  large  enough  to  make  imperative  a  considerable  contraction  in 
the  bank's  loans,  and  the  savage  hostility  and  unscrupulous  methods 
of  the  administration  warned  the  officers  of  the  bank  to  conserve 
their  resources  to  the  utmost,  and  to  be  prepared  for  every  con- 
tingency. As  Webster  pointed  out,  the  administration  not  only 
removed  the  government  deposits,  but  assailed  the  credit  of  the 
bank  itself  to  an  extent  that  would  have  threatened  the  stability 
of  the  strongest  financial  institution  on  earth.  But  the  bank  weath- 
ered the  storm ;  the  State  banks,  under  the  inspiration  of  the  Secre- 
tary of  the  Treasury,  kept  the  country  full  of  "wildcat"  money ; 
the  panic  which  threatened  in  1834  was  deferred  for  three  years, 
and  a  fictitious  prosperity,  attended  by  wild  speculation,  lasted 
until  President  Jackson  and  his  advisers,  becoming  conscious  of 
the  peril  of  this  financial  debauch,  checked  it,  so  far  as  the  public 
lands  were  concerned,  by  the  famous  Specie  Circular  already 
mentioned. 

In  November,  1836,  several  large  English  houses  with  extensive 
American  connections  were  forced  into  liquidation,  their  failure 
following  a  severe  contraction  of  credits  by  the  Bank  of  England, 
and  consequent  decline  in  prices  of  commodities.  The  business  of 
the  new  world  and  the  old  was  not  then  so  interdependent  as  it 
became  half  a  century  later,  but  the  failure  of  the  "three  W's,"  as 
the  large  English  houses  of  Wilkes,  Wilde,  and  Wiggins  were 
known,  was  not  without  influence  at  that  critical  time. 

There  were  some  who,  like  Senator  Thomas  H.  Benton  of  Mis- 
souri, foresaw  the  approaching  catastrophe  and  raised  a  warning 
voice,  but  the  great  majority  of  the  people  refused  to  believe  that 
all  was  not  well  and  that  the  apparent  prosperity  of  the  country 
was  based  upon  an  over  issue  of  irredeemable  bank  notes. 

Even  so  staple  a  commodity  as  cotton,  which  sold  in  1836  as 
high  as  20  cents  a  pound,  declined  to  less  than  one-half  this  price  in 
the  early  part  of  1837. 

The  New  Orleans  banks  had  made  large  loans  for  which  they 
held  cotton  as  collateral ;  the  collapse  in  prices  appears  to  have  been 


104  HISTORY  OF  THE  BOARD  OF  TRADE 

felt  first  in  that  city,  and  it  is  claimed  that  the  failure  of  Herman 
Briggs  &  Co.  in  March,  1837,  started  the  trouble.  Be  this  as  it  may, 
the  alarm  quickly  spread  to  New  York,  and  on  the  10th  of  May  all 
the  banks  in  New  York  City  found  themselves  obliged  to  suspend 
specie  payments,  and  the  Philadelphia  and  Baltimore  banks  followed 
immediately.  The  distress  in  all  commercial  centers  was  acute, 
and  the  address  handed  to  President  Van  Buren  by  a  committee 
of  New  York  merchants,  who  visited  Washington  in  the  hope  of 
obtaining  relief,  pictures  conditions  at  other  points  as  well  as  New 
York.  They  asserted  that  "within  the  preceding  six  months  real 
estate  in  New  York  City  had  depreciated  more  than  $40,000,000.00; 
that  within  the  last  two  months  there  have  been  more  than  250 
failures  of  houses  engaged  in  extensive  business ;  a  decline  of 
$20,000,000.00  in  our  local  stocks ;  merchandise  in  our  warehouses 
has  fallen  at  least  30  per  cent,  and  not  less  than  20,000  individuals 
have  been  discharged  by  their  employers  because  the  means  of 
retaining  them  were  exhausted ;  and  a  complete  blight  has  fallen 
upon  the  community."     (Von  Hoist,  vol.  2,  p.  195.) 

At  first  the  people  of  Chicago  tried  to  believe  that  because  they 
had  neither  stocks  nor  bonds  nor  cotton  to  fall  in  price,  they  would 
be  untouched  by  the  ruin  which  devastated  the  East  and  South. 
They  had  land  which  had  a  real  value,  and  the  canal,  now  guaran- 
teed by  the  State,  would  in  a  few  years  create  a  city  of  such  impor- 
tance that  the  highest  prices  yet  reached  for  real  estate  would  look 
cheap.  The  line  of  reasoning  was  plausible,  but  like  many  theories, 
this  one  failed  to  work.  For  several  years  the  man  who  was  most 
deeply  in  debt  had  been  the  man  who  was  making  money  most 
rapidly.  Debt  was  the  royal  road  to  wealth,  and  everybody  traveled 
that  way.  But  now  debts  were  coming  due,  nobody  wanted  to  buy 
anything  at  any  price,  and  soon  conditions  were  as  bad  in  Chicago 
as  elsewhere.  Even  the  funds  depended  upon  for  construction  of 
the  canal  and  railroads  were  entangled  in  the  affairs  of  the  State 
Bank,  which  was  fiscal  agent  for  both  these  public  improvements, 
and  in  July,  1837,  the  Legislature  of  Illinois  was  called  in  special 
session  by  Governor  Ford,  who  recommended  a  repeal  or  modifica- 
tion of  the  internal  improvement  system.  Instead,  an  Act  was 
passed  suspending  specie  payment,  which  enabled  the  State  Bank 
to  continue  business  for  some  years,  although  impaired  in  reputa- 
tion as  a  financial  institution,  and  never  able  to  resume  specie  pay- 
ments. Work  on  the  canal  was  continued  by  the  commissioners  as 
long  as  they  could  sell  State  bonds,  but  toward  the  close  of  1838 
the  treasury  was  empty  and  everything  came  to  a  stop. 

In  the  following  winter  more  funds  were  secured,  partly  from 
the  State  and  partly  by  the  issue  of  scrip  by  the  canal  commissioners, 
and  a  large  amount  of  work  was  done  on  the  canal  during  the  year 
1839,  notwithstanding  the  failure  of  the  Michigan  banks  whose 
bills  composed  a  large  part  of  the  money  in  circulation  in  Chicago, 


1 


OF  THE  CITY  OF  CHICAGO  105 

and  the  suspension  of  the  State  Bank  with  its  numerous  branches 
on  the  23rd  of  October.  There  was  no  recovery  in  the  price  of 
realty,  which  in  the  fall  of  1837  fell  almost  to  zero,  and  for  three 
or  four  years  was  practically  unsalable.  The  few  sales  which  were 
made  showed  declines  of  75  to  90  per  cent,  and  much  property  was 
abandoned  to  the  tax  collector. 

In  an  address  delivered  before  "The  Chicago  Lyceum,"  Janu- 
ary 21,  1840,  Mr.  Joseph  N.  Balestier  pictured  conditions  in  Chicago 
during  the  period  of  panic,  while  the  recollection  of  those  disastrous 
years  was  still  vividly  impressed  upon  his  hearers,  as  well  as  upon 
the  mind  of  the  speaker.  After  describing  the  wild  speculation  of 
the  years  1835  and  1836,  he  says:  "But  the  day  of  retribution  was 
at  hand.  *  *  *  The  year  1837  will  ever  be  remembered  as  the  era 
of  protested  notes  ;  it  was  the  harvest  to  the  notary  and  the  lawyer — 
the  year  of  wrath  to  the  mercantile,  producing  and  laboring  inter- 
ests. Misery  inscribed  its  name  on  many  a  face  but  lately  radiant 
with  high  hopes ;  *  *  *  the  land  resounded  with  the  groans  of 
ruined  men,  and  the  sobs  of  defrauded  women  who  had  entrusted 
their  all  to  greedy  speculators.  *  *  *  It  was  a  scene  of  woe  and 
desolation." 

The  population  of  the  city  remained  stationary,  many  business 
houses  were  closed,  and  quite  a  number  of  discouraged  citizens 
moved  away.  The  assessed  valuation  of  city  real  estate,  which 
was  $236,842.00  in  1837,  had  fallen  in  1840  to  $94,437.00,  and  the 
population  was  only  a  few  hundred  more  in  the  latter  year  than 
when  the  city  was  incorporated  three  years  before.  The  following 
table  shows  the  population  in  each  year  from  the  time  the  town 
of  Chicago  was  incorporated  in  1833  to  the  year  1848,  when  the 
canal  was  completed,  and  the  Galena  &  Chicago  Union  Railroad 
began  operating  its  first  ten  miles  of  railway : 

1833 *350  1841 5,500 

1834 *1,800  1842 *6,590 

1835 3,265  1843 7,580 

1836 *4,000  1844 *8,000 

1837 4,179  1845 12.088 

1838 *4,000  1846 14,169 

1839 *4,200  1847 16,859 

1840 4,470  1848 20,023 

Even  sales  of  public  lands  almost  ceased  for  a  time,  the  number 
of  acres  sold  by  the  United  States  Land  Office  in  Chicago  in  1837 
having  been  only  15,697*,  against  370,043*  sold  in  1835  and  202,315* 
sold  in  1836. 

Prices  of  farm  produce  shared  the  collapse  in  the  value  of  other 
commodities,  and  March  21,  1840,  "The  Chicago  Morning  Democrat" 
quotes :    Beef,  4@5c  per  pound ;  pork,  4@5c  per  pound ;  butter, 

*  Estimated. 


106  HISTORY  OF  THE  BOARD  OF  TRADE 

18%@20c  per  pound ;  flour,  $4.00@4.50  per  barrel ;  wheat,  50@62^c 
per  bushel ;  turkeys,  75c@$l  each ;  ducks,  25c  each ;  chickens,  25c 
each  ;  eggs,  12i^c  per  dozen  ;  potatoes,  25c  per  bushel. 

It  must  have  been  some  consolation  to  the  bankrupt  people  of 
Chicago  that  living  was  cheap.  Judge  Moses  in  1839-1840  quotes 
venison,  $1.50  for  a  carcass;  prairie  chickens,  $1.00  a  dozen;  quail, 
3c  each ;  beef,  6c  a  pound ;  flour,  $3.00  per  barrel  (vol.  I,  p.  106),  and 
good  board  at  the  best  hotels  could  be  obtained  for  $2.00  a  week. 

If  two  dollars  a  week  was  considered  too  much  to  pay  for 
board  at  a  first-class  hotel,  city  lots  could  be  made  to  yield  enough 
to  support  life,  and  it  was  the  general  cultivation  of  gardens  which 
gave  Chicago  the  sobriquet  of  "Garden  City,"  which  it  retained  for 
many  years. 

Discouraged  as  they  were  by  the  sudden  reverses  of  fortune 
which  they  had  experienced,  the  people  of  Chicago  did  not  despair, 
and  even  in  the  six  darkest  years  of  the  city's  history  the  following 
new  enterprises  were  undertaken :  Furniture  factory,  by  Charles 
Morgan,  1837;  first  sash,  door  and  blind  factory,  by  Ira  Miltmore, 
1837  or  1838;  Chicago  postoffice  was  made  a  distributing  office, 
1837;  first  steamboat  ("James  Allen")  was  launched,  1838;  first 
boots  and  shoes  manufactured  by  S.  B.  Collins  &  Co.  in  1838; 
first  wheat  was  shipped  to  Buffalo  (78  bushels)  by  Charles  Walker 
in  1838;  first  daily  newspaper  ("Chicago  Daily  American")  April  9, 
1839;  first  brass  foundry,  by  William  &  J.  Rankin,  1839;  first 
brewery  by  William  Lill,  1839;  first  engraving  was  done  by  S.  D. 
Childs  in  1839;  "Chicago  Morning  Democrat,"  February  24,  1840; 
permanent  public  free  schools  in  1840;  first  book  compiled  and 
printed  ("Scammon's  Report"),  1840;  first  floating  swing  bridge  at 
Clark  Street,  1840;  first  shipment  of  wool,  by  B.  W.  Raymond, 
1840 ;  Chicago  Library  Association  organized,  1841 ;  floating  swing 
bridge  at  Wells  Street,  1841  ;  first  propeller  built  on  Lake  Michigan 
was  launched  at  Averill's  Shipyard,  Chicago,  in  1842;  shipments 
by  lake  from  Chicago  were  more  than  receipts  for  the  first  time  in 
1842 ;  Chicago  Hydraulic  Company's  water  works  system  com- 
menced operation  in  1842. 

There  is  no  complete  file  of  the  early  Chicago  newspapers  in 
existence,  most  of  the  copies  which  had  been  saved  until  1871  having 
been  destroyed  in  the  Great  Fire  of  that  year.  In  such  newspapers 
of  the  years  1837  to  1842  as  are  now  in  the  possession  of  the  Chicago 
Historical  Society  are  many  advertisements  of  lots  and  lands  in 
outside  places  now  forgotten,  but  each  of  which  in  the  "boom  times" 
of  1835  and  1836  was  expected  to  become  a  metropolis.  One  promis- 
ing feature  of  the  years  which  followed  the  panic  of  1837  was  the 
increase  in  the  number  of  firms  who  advertised  merchandise  of  one 
sort  or  another  at  wholesale.  Although  there  was  no  perceptible 
increase  in  population  until  1841,  these  advertisements  show  that 
the  energetic  and  brainy  men  who  laid  the  foundations  of  Chicago 


OF  THE  CITY  OF  CHICAGO  107 

already  sensed  the  true  mission  of  their  city  as  a  great  mart  for  com- 
merce in  a  large  way,  and  prepared,  so  far  as  their  limited  means 
would  allow,  to  supply  the  demands  of  the  growing  interior.  If 
the  city  stood  still  until  1841,  northern  Illinois  did  not.  The  sale 
of  public  lands  at  the  United  States  Land  Office  in  Chicago  ceased 
for  a  time ;  but  in  1839,  160,635  acres  were  sold ;  in  1840,  137,382 
acres;  in  1841,  138,583  acres,  and  for  several  years  thereafter  the 
sales  averaged  more  than  200,000  acres  annually. 

The  census  of  1840  showed  that  the  State  of  Illinois  had  gained 
in  population  during  the  preceding  decade  a  little  more  than  200 
per  cent,  the  number  of  souls  in  1840  being  476,183,  against  157,445 
ten  years  before.  And  the  important  fact,  so  far  as  Chicago  inter- 
ests were  concerned,  was  that  nearly  one-third  of  this  increase  was 
in  the  fourteen  northern  counties  of  the  State,  and  in  the  six  other 
organized  counties  on  the  line  of  the  proposed  Illinois  and  Michigan 
Canal  and  the  Illinois  River  from  Peoria  northward,  as  the  following 
table  of  increased  population  plainly  shows : 

Name  of                           Gain,  Name  of                           Gain, 

County                           1830-40  County                           1830-40 

Jo  Daviess 4,069     Kane 6,501 

Stephenson 2,800      DuPage 3,535 

Winnebago 4,609      Cook 10,201 

Boone 1,705      Will   10,167 

Lake 7,654      LaSalle    9,348 

Carroll   1,023      Bureau 3,067 

Ogle 3,479      Putnam   1,800 

Whiteside  2,514      Marshall    1,849 

Lee 2,035     Peoria 6,153 


McHenry 2,578  

DeKalb    1,697  86,784 

To  the  increase  of  86,784  in  these  twenty  tributary  counties 
it  would  not  be  unfair  to  add  a  portion  of  the  gain  in  Vermilion, 
Iroquois  and  a  few  other  counties,  enough  at  least  to  warrant  the 
statement  that  one-third  of  the  increased  population  of  the  State 
was  in  Chicago  territory. 

It  will  be  remembered  that  only  a  few  days  before  the  Legis- 
lature passed  the  Act  incorporating  the  city  of  Chicago,  it  appro- 
priated $9,650,000.00  to  build  railroads  in  different  parts  of  the  State. 
In  order  to  appease  the  jealousy  of  counties  through  which  no 
railroad  or  canal  could  be  made  to  run,  the  Legislature  found  it 
necessary  to  distribute  to  them  $200,000.00,  and  it  was  ordered 
that  work  should  begin  simultaneously  upon  each  end  of  every 
projected  railroad,  so  that  the  benefits  of  the  Internal  Improvement 
Act  might  be  apparent  to  all  the  people  of  the  State.  Work  was 
begun  at  many  widely  separated  places,  but  the  panic  of  1837  com- 
menced  a   few   weeks   after   the   Internal    Improvement   Act   went 


108  HISTORY  OF  THE  BOARD  OF  TRADE 

into  operation,  money  could  not  be  procured,  and  two  years  later 
the  General  Assembly  at  a  special  session  repealed  the  whole  system. 
The  State  of  Illinois  had  contracted  a  debt  of  $14,237,348.00  for 
the  railroads  and  the  canal,  and  had  to  show  for  this  vast  expendi- 
ture, in  1840,  only  an  unfinished  canal,  a  few  miles  of  unfinished 
railroad  at  widely  separated  points,  and  a  finished  railroad  from 
Springfield  to  the  Illinois  River.  This  finished  railroad,  costing 
about  a  million  dollars,  was  operated  by  the  State  at  a  loss  for 
several  years,  and  finally  sold  for  about  one  hundred  thousand 
dollars  in  State  indebtedness. 

Fortunately  for  Chicago,  the  canal  was  not  involved  in  the 
general  collapse  of  the  internal  improvement  system,  the  work 
which  had  been  done  was  worth  all  it  had  cost,  and  the  great  bene- 
fits derived  from  the  opening  of  the  Erie  Canal  in  1825  proved  con- 
clusively that  whenever  it  should  be  possible  to  secure  funds  to 
complete  this  waterway  the  most  extravagant  dreams  of  its  projec- 
tors would  be  realized.  We  are  now  so  entirely  dependent  upon 
railroads  for  freight  traffic,  as  well  as  for  passenger  service,  that  it 
is  hard  for  us  to  appreciate  the  utter  helplessness  of  the  early 
settlers  in  such  a  roadless,  bridgeless  country  as  northern  Illinois 
was  at  the  beginning  of  its  existence  in  1830  and  1840,  so  far  as 
the  ability  to  move  the  heavy  produce  of  their  farms  for  any  great 
distance  was  concerned.  Rivers  and  canals  possessed  at  that  time 
an  importance  that  was  lost  when  half  a  century  of  feverish  activity 
had  covered  the  State  with  a  network  of  iron  rails  which  reached 
every  town  of  importance  in  the  commonwealth.  The  early  settle- 
ment of  the  southern  and  western  parts  of  the  State  was  due  to  the 
navigable  waters  of  the  Mississippi,  the  Ohio,  the  Wabash  and 
the  Illinois  rivers,  and  especially  to  the  introduction  of  steam  navi- 
gation upon  these  streams  about  1817  and  its  rapid  development 
in  the  following  years.  According  to  Von  Hoist,  "the  tonnage  of 
the  steamboats  on  the  western  rivers  rose,  in  the  years  1830-1837, 
from  63,053  to  253,661,"  and  in  1834  it  has  been  estimated  that 
90,000  persons  were  employed  in  the  trade,  either  as  crews,  build- 
ers, wood-cutters  or  loaders  of  the  230  boats  then  engaged  in  navi- 
gating the  Mississippi  River. 

The  first  railroad  chartered  in  America  was  the  Mohawk  & 
Hudson,  from  Albany  to  Schenectady,  in  1825  or  1826,  but  work 
upon  its  construction  did  not  begin  until  1830,  in  which  year  there 
were  only  twenty-three  miles  of  passenger  railway  in  the  United 
States.  Tramways  operated  by  horses  or  by  stationary  engines 
had  been  in  use  for  several  years,  both  in  the  United  States  and 
in  Europe,  but  modern  railroading  dates  from  the  introduction  of 
the  steam  locomotive.  The  first  one  of  these  engines  seen  in  this 
country  was  built  by  George  Stephenson  at  Newcastle-on-Tyne 
and  imported  in  1829  by  the  Delaware  &  Hudson  Canal  Company 
for  use  on  the  railroad  from  their  coal  mines  to  the  terminus  of 


OF  THE  CITY  OF  CHICAGO  109 

the  canal.  In  spite  of  many  defects  in  roadbed,  as  well  as  in  motive 
power,  the  value  of  this  new  agency  in  civilization  was  quickly 
seen,  and  charters  were  granted  by  New  York,  New  Jersey,  Massa- 
chusetts, Pennsylvania,  Maryland,  South  Carolina  and  other  States 
for  numerous  roads.  Among  the  earliest  roads  to  use  the  new 
motive  power  were  the  Charleston  &  Hamburg  in  South  Carolina 
and  the  Baltimore  &  Ohio.  The  rapid  extension  of  railways  in  the 
United  States  is  shown  by  the  following  statement  of  mileage  taken 
from  the  "American  Encyclopedia":  1840,  2,167;  1842,  3,863;  1844, 
4,285;  1846,  4,828;  1848,  6,491;  1850,  8,827. 

Naturally,  most  of  this  mileage  was  in  the  older  and  wealthier 
States  east  of  the  Alleghenies,  even  Ohio  being  credited  with  84 
miles  only  in  1846,  Indiana  with  30,  and  Illinois  with  22.  Michigan, 
however,  had  in  1846  238  miles  of  railway,  that  State  having 
undertaken  to  complete  the  Detroit  &  St.  Joseph  Railroad,  begun 
by  private  capital  before  the  panic  of  1837.  After  investing  about 
$4,500,000.00  and  the  proceeds  of  305,000  acres  of  land  in  this  and 
other  "internal  improvement"  enterprises,  the  State  of  Michigan 
sold  the  Detroit  &  St.  Joseph  Railroad  to  the  Michigan  Central 
Railroad  Company,  and  in  1852  it  was  extended  to  Chicago. 

A  good  angel  must  have  watched  over  the  fortunes  of  the 
Illinois  and  Michigan  Canal,  because  in  1840,  when  the  credit  of 
the  State  had  been  impaired  by  the  failure  of  the  "Internal  Improve- 
ment" system  and  the  heavy  indebtedness  incurred  thereby,  the 
canal  contractors,  finding  that  the  "hard  times"  and  consequent 
fall  in  prices  enabled  them  to  reduce  their  figures  for  work,  volun- 
tarily offered  to  take  one  million  dollars  of  State  bonds  at  par 
provided  these  bonds  could  be  sold  at  a  discount  of  25  per  cent. 
This  was  equivalent  to  a  reduction  of  25  per  cent  in  their  original 
contracts.  The  sale  of  these  bonds  upon  that  basis  was  arranged, 
and  the  work  was  prosecuted  in  1840.  Some  other  desperate  devices 
were  adopted  and  some  work  done  in  1841,  but  the  estimates  for 
1842  could  not  be  met,  and  in  March,  1843,  work  was  entirely 
suspended. 

Although  the  city  had  begun  to  grow  again  and  business  was 
increasing,  the  year  1842  was  in  some  respects  the  most  discouraging 
of  all  the  years  which  followed  the  panic.  The  prospect  that  work 
on  the  canal  would  have  to  stop,  as  it  did  in  the  following  spring; 
the  final  collapse  of  the  State  Bank  in  February  1842,  followed  in 
June  by  the  failure  of  the  Bank  of  Shawneetown,  organized  on 
similar  lines  to  the  State  Bank,  were  depressing  in  the  extreme. 
Governor  Ford  says  that  when  he  came  into  office  in  1842  he  esti- 
mated that  "the  good  money  in  the  State,  in  the  hands  of  the  people, 
did  not  exceed  one  year's  interest  on  the  public  debt."  Conditions 
were  so  desperate  that  Congress  had  passed  a  bankruptcy  law  in 
August,  1841,  a  commissioner  for  Chicago  was  appointed  in  March, 
1842,  and  before  the   1st  of  September  forty   Chicago  merchants 


no         HISTORY  OF  THE  BOARD  OF  TRADE 

availed  themselves  of  this  opportunity  to  be  freed  from  debts  they 
could  not  pay,  preparatory  to  making  a  fresh  start  in  business. 
This  marked  the  turn  of  the  tide. 

Wholesale  Trade 

Through  all  the  years  of  depression  Chicago  merchants  were 
trying  to  establish  a  wholesale  trade,  as  an  examination  of  the  news- 
papers of  the  period  plainly  shows.  The  first  number  of  the  Chicago 
"Democrat,"  issued  November  26,  1833,  contains  the  advertisement 
of  Newberry  &  Dole,  forwarding  and  commission  merchants,  who 
have  just  received  an  assortment  of  dry  goods,  hardware,  crockery, 
etc.,  which  they  offer  to  sell  low  for  cash. 

Also  the  advertisement  of  B.  Jones,  storage,  forwarding  and 
commission  business,  who  has  made  arrangements  to  forward  to 
New  York  via  the  Erie  Canal  any  property  that  may  be  consigned 
to  him. 

Daniel  Elston  &  Co.,  the  newly  established  soap  and  candle 
manufacturers,  also  advertised  in  this  number  of  the  "Democrat." 
These  enterprising  gentlemen  may  be  considered  the  prototypes  of 
the  great  commission  houses  who  in  later  years  composed  the 
Board  of  Trade  of  the  city  of  Chicago. 

In  the  following  year,  Daniel  Carver,  auction  and  commission 
merchant  and  lumber  dealer;  also  John  H.  Kinzie,  forwarding  and 
commission  merchant,  and  Hubbard  &  Co.,  commission  and  for- 
warding merchants,  were  regular  advertisers,  and  several  firms 
offer  dry  goods,  groceries,  hardware,  crockery,  etc.,  at  wholesale. 
Hubbard  &  Co.,  who  offer  the  assortment  just  mentioned,  say: 
"Dealers  in  the  interior  will  find  it  to  their  advantage  to  call  before 
they  go  to  St.  Louis  or  the  East,  as  these  goods  were  purchased 
of  importers  in  New  York,  and  can  be  afforded  at  a  low  price." 
Russell  &  Clift  ofifer  at  "wholesale  and  retail"  books  and  stationery; 
Wm.  H.  Taylor,  books,  shoes  and  leather;  Jones  &  King,  stoves  and 
hollow  ware  ;  John  H.  Kinzie,  dry  goods,  saddlery,  groceries,  crock- 
ery, tinware  and  hardware ;  P.  Pruyne,  groceries,  hardware,  crock- 
ery, etc. ;  J.  S.  C.  Hogan,  a  similar  assortment ;  and  Harmon  Lewis  & 
Co.,  in  addition  to  their  offer  of  dry  goods  at  wholesale  and  retail, 
announce  that  as  agents  for  a  large  candle  manufactory  they  can 
sell  at  the  lowest  Buffalo  or  Detroit  prices,  with  freight  added ; 
Philo  Carpenter  announces  himself  as  wholesale  and  retail  druggist ; 
G.  W.  Keeney  offers  cooking  stoves,  tin,  sheet  iron  and  copper  ware. 

Every  newspaper  from  the  first  issue  of  the  "Democrat"  onward 
contains  evidence  that  the  early  Chicagoans  were  seeking  to  attract 
the  wholesale  trade,  and  it  is  unnecessary  to  claim  that  the  amount 
of  that  trade  was  at  first  very  extensive.  Firms  in  other  lines  of 
business  soon  followed  these  pioneers  in  the  wholesale  trade,  J.  A. 
Smith  &  Co.  offering  hats,  caps  and  furs,  and  John  Holbrook  adver- 
tising himself  as  "manufacturer's  agent." 


OF  THE  CITY  OF  CHICAGO  111 

After  the  panic  of  1837,  advertisements  of  desirable  lots  in 
Macomb,  Hancock  and  Tazewell  Counties,  Illinois ;  Michigan  City, 
Indiana ;  Bertrand,  Dearbornville,  Montville,  Michigan,  and  other 
places  now  quite  forgotten,  ceased ;  but  the  Chicago  merchants  still 
used  the  columns  of  the  newspapers,  and  on  the  7th  of  November, 
1839,  R.  &  J.  Woodworth  insert  in  the  "Daily  American"  an  adver- 
tisement as  dry  goods  jobbers,  offering  to  sell  at  wholesale  for  cash, 
"or  in  exchange  for  wheat  or  pork."  This  advertisement  continued 
to  appear  until  July,  1840.  Evidently  the  frontier  city  of  4,000 
people,  most  of  whom  were  bankrupt,  was  not  ready  to  support  a 
dry  goods  jobbing  house.  But  the  fact  that  anyone  at  that  time 
had  the  efifrontery  to  attempt  such  a  business,  speaks  volumes  for 
the  prophetic  vision  of  the  people. 

More  encouraging  still  was  the  growing  commerce  in  the  prod- 
uce of  the  interior  which  sought  Chicago  as  a  market.  The  initial 
shipment  by  Newberry  &  Dole  of  287  barrels  beef,  14  barrels  tallow, 
4,659  pounds  hides  and  2  barrels  beeswax  in  April,  1833,  to  which 
reference  has  been  made,  apparently  was  the  only  export  of  food 
from  Chicago  prior  to  1836,  although  Judge  Thomas  is  said  to 
have  stated  in  a  report  made  in  1847  that  small  quantities  of  beef 
and  pork  were  exported  each  year  thereafter.  The  rapid  settle- 
ment of  northern  Illinois  created  a  home  demand  for  all  the  settlers 
could  produce  until  1838  or  1839,  and  Chicago  imported  from  the 
East,  and  principally  from  Ohio,  flour,  corn,  beans  and  other  neces- 
saries of  life,  except  beef  and  pork,  of  which  enough  for  local  con- 
sumption came  in  on  the  hoof  from  the  interior  of  the  State 
after  1834. 

Lumber  had  been  from  the  beginning  of  the  town  one  of  the 
chief  articles  of  import  at  Chicago,  as  the  forests  of  Michigan  and 
Wisconsin  were  the  only  available  sources  from  which  the  treeless 
prairies  of  northern  Illinois  could  be  supplied  with  this  indispensable 
building  material.  There  was  some  scattering  timber  along  the 
streams  in  the  interior,  but  the  inferior  quality  and  scanty  supply  of 
this  sort  of  lumber  made  it  a  small  factor  in  the  trade.  Probably 
the  first  commercial  vessel  which  entered  the  Chicago  River  was 
the  little  schooner  "David  Carver,"  named  for  its  owner,  which  with 
its  cargo  of  pine  lumber  from  St.  Joseph,  Michigan,  was  "worked" 
across  the  sandbar  at  the  mouth  of  the  stream,  then  east  of  the 
present  corner  of  Michigan  Avenue  and  Madison  Street,  and  un- 
loaded on  South  Water  Street  between  La  Salle  and  Wells  Streets. 
As  the  city  and  its  tributary  country  grew,  the  lumber  trade  of 
Chicago  increased,  and  undoubtedly  a  large  proportion  of  the  150 
vessels  which  brought  their  cargoes  to  Chicago  between  the  20th 
of  April  and  the  3rd  of  September,  1834,  were  loaded  with  lumber. 

The  increasing  exports  of  beef  and  pork  during  the  period  now 
under  consideration,  although  far  exceeded  in  value  after  1839  by 
wheat,   indicate  a   prosperous   condition   of  the  packing   industry, 


112  HISTORY  OF  THE  BOARD  OF  TRADE 

which  is  further  evidenced  by  the  new  firms  whose  names  as  ship- 
pers of  these  products  appear  after  1838.  Among  them  are  Payne  & 
Norton,  Dodge  &  Tucker,  and  Absalom  Funk,  all  of  whom,  however, 
except  Mr.  Funk,  were  commission  merchants,  rather  than  packers. 

Credit  already  has  been  given  to  George  W.  Dole  as  the  pioneer 
packer  and  shipper  of  beef  and  pork  in  1832  and  1833,  although 
Archibald  Clybourne  five  years  earlier  built  a  log  slaughter  house 
on  the  North  Branch  about  three  miles  above  Fort  Dearborn,  where 
he  killed  the  cattle  required  by  the  garrison.  This  enterprise  of 
Mr.  Clybourne  was  a  butcher  shop  business  for  local  consumers, 
and  does  not  belong  in  the  class  of  large  ventures  which  include 
the  operations  of  Mr.  Dole  in  1832-1833,  Newberry  &  Dole,  who 
built  a  packing  house  on  the  South  Branch  in  1834,  and  Gurdon  S. 
Hubbard,  who  began  packing  during  the  same  year  in  the  old  Bank 
building,  corner  of  Lake  and  La  Salle  Streets,  and  who  three  years 
later  built  a  packing  house  on  Kinzie  Street  near  Rush  Street,  and 
in  1840  still  another  packing  house  on  South  Water  Street,  between 
Clark  and  La  Salle  Streets,  where  he  conducted  the  business  until 
1848.  Before  he  came  to  Chicago  to  reside,  Mr.  Hubbard  had  a 
store  in  Danville,  and  in  the  winter  of  1830-31  he  brought  a  drove 
of  hogs  to  Chicago  and  killed  them  for  local  consumption.  Sylvester 
Marsh  was  another  early  packer,  who  was  associated  with  Gurdon  S. 
Hubbard  in  1834,  and  in  1838  or  1839  formed  a  partnership  with 
George  W.  Dole.  Several  persons  in  other  lines  of  business  appear 
to  have  employed  the  owners  of  packing  houses  to  slaughter  and 
pack  beef  and  pork  for  them  during  the  early  years,  Sherman  & 
Pitkin,  a  dry  goods  firm,  and  William  Felt  &  Co.  among  the  number. 
The  latter  firm  in  this  way  employed  A.  Clybourne  during  the  winter 
of  1842-1843  to  pack  for  them  about  three  thousand  beeves  for  the 
New  York  market,  the  first  beef  packed  for  that  market,  it  is  said. 

No  statistics  of  receipts  in  detail  during  the  early  years  are 
available.  The  same  may  be  said  about  the  shipments  of  beef  and 
pork  in  1834  and  1835.  Any  shipment  of  either  of  these  articles 
of  food  during  these  years,  if  such  there  were,  must  have  been 
insignificant  in  amount.  Beginning  with  the  year  1836,  statistics 
become  available,  and  the  following  table  (Colbert,  p.  47)  of  imports 
and  exports  from  that  year  to  1842  gives  a  good  idea  of  the  expansion 
of  Chicago's  commerce : 

Year  Imports  Exports 

1836 $325,203.90  $     1,000.64 

1837 373,677.12  11,665.00 

1838 579,974.61  16,044.75 

1839 630,980.26  33,843.00 

1840 562,106.20  228,635.74 

1841 564,347.88  348,862.24 

1842 664,347.88  659,805.20 


»: 


V. 


c 
c 

if. 


c 
r. 


OF  THE  CITY  OF  CHICAGO  113 

This  table  of  imports  shows  that  with  the  exception  of  the  years 
1840  and  1841  there  was  a  steady  increase  in  the  value  of  goods 
received  at  Chicago,  in  spite  of  the  general  bankruptcy  caused  by 
the  panic;  and  that  in  the  last  year  of  the  seven-year  period  (1842) 
more  than  twice  as  much  merchandise  of  one  sort  or  another  arrived 
by  lake  vessels  as  was  received  in  1836,  when  the  "boom"  was  at 
its  height.  As  the  population  of  the  city  had  been  almost  stationary 
until  1841,  and  many  of  those  who  lived  in  Chicago  were  bankrupt 
and  in  no  condition  to  purchase  freely,  the  only  possible  inference 
from  these  figures  is  that  the  settlers  in  the  interior  were  buying 
more  lumber,  dry  goods,  groceries,  hardware  and  general  mer- 
chandise in  Chicago,  and  that  they  were  in  some  way  paying  for 
these  purchases,  either  with  money  or  with  the  products  of  the  soil. 
An  analysis  of  the  table  of  exports,  incomplete  as  it  is,  shows  how 
the  country  tributary  to  Chicago  was  increasing  its  output. 

In  1836  the  only  lake  shipment  from  Chicago  of  which  there 
is  any  record  is  a  consignment  of  hides  worth  $1,000.64,  and  weigh- 
ing perhaps  12,000  or  14,000  pounds,  as  dry  hides  are  quoted  at  7@8c 
a  pound  in  the  "Chicago  Democrat"  of  September  14,  1836.  In  1837 
the  export  of  $11,665.00  is  made  up  principally  of  hides  to  the  value 
of  $10,000.00  and  beef  and  pork  amounting  to  $1,000.00. 

In  1838  the  value  of  hides  has  increased  to  $15,000.00,  and  for 
the  first  time  in  its  history  Chicago  forwarded  wheat  to  the  East, 
Walker  &  Co.,  who  had  shipped  all  the  hides  in  this  and  the  two 
preceding  years,  appearing  as  consignors  of  39  bags  of  wheat  (78 
bushels)  on  the  steamer  "Great  Western"  for  Buffalo.  There  is  a 
mine  of  information  in  these  figures.  The  small  exports  of  beef  and 
pork  during  1836,  1837  and  1838,  and  comparatively  large  quantity 
of  hides  sent  out,  show  that  Chicago  during  the  last  of  this  period 
was  fully  supplied  with  meat  from  the  interior,  while  the  little 
shipment  of  78  bushels  of  wheat  was  an  indication  that  northern 
Illinois  would  soon  produce  its  own  bread  as  well. 

In  October,  1839,  Newberry  &  Dole,  whose  warehouse  was  on 
the  North  Side,  just  east  of  where  Rush  Street  bridge  now  stands, 
shipped  on  the  brig  "Osceola"  1,678  bushels  of  wheat  which  had 
been  bought  from  the  farmers'  wagons  and  hoisted  to  the  top  floor 
by  rope  and  pulley.  The  wheat  was  spouted  to  the  deck  of  the 
vessel,  where  it  was  caught  in  boxes  holding  four  bushels  each, 
weighed,  and  dumped  into  the  hold  of  the  ship.  It  was  the  custom 
about  this  time  for  the  purchaser,  instead  of  paying  cash  on  the 
delivery  of  grain,  to  give  a  receipt  like  the  following: 

Chicago,  Dec.  23,  1842. 
Received  in  store  from  Mr.  Brown,  30  bushels  and  20 
pounds  wheat  at  44j^c. 

For  account  of  H.  O.  Stone.  Newberry  &  Dole, 

Per  Julian. 


114  HISTORY  OF  THE  BOARD  OF  TRADE 

Upon  receipt  of  the  certificate,  Mr.  Brown  would  use  it  in  the 
purchase  of  goods  or  in  settlement  of  account.  The  merchant,  after 
purchasing  a  number  of  such  receipts,  would  present  them  to  New- 
berry &  Dole,  who  would  give  their  note  for  the  amount,  payable 
at  some  future  time. 

A  copy  of  the  bill  of  lading  for  this  shipment  by  Newberry  & 
Dole  was  published  in  the  "Press  and  Tribune,"  January  6,  1859, 
and  it  is  there  spoken  of  as  "the  first  bill  of  lading  for  wheat  made 
out  in  Chicago.    It  reads : 

"Chicago,  Oct.  8,  1839. 

"Shipped  in  good  order  and  well  conditioned  by  Newberry  & 
Dole,  as  agents  and  forwarders,  for  account  and  risk  of  whom  it 
may  concern,  on  board  the  brig  called  the  'Osceola,'  whereof  Francis 
Billings  is  master,  now  lying  in  the  port  of  Chicago,  and  bound  for 
Black  Rock,  the  following  articles,  being  marked  and  numbered  as 
in  the  margin,  and  to  be  delivered  in  like  good  order  at  the  port 
of  Black  Rock  (the  dangers  of  navigation  being  excepted),  unto 
the  consignee  named  in  the  margin,  or  to  the  assigns.  The  freight 
and  charges  to  be  paid  as  noted  below. 

"In  witness  whereof,  the  master  of  said  vessel  hath  affirmed  two 
bills  of  lading,  of  this  tenor  and  date,  one  of  which  being  accom- 
plished, the  other  to  stand  void. 

"Tingman  &  Durfre,  664  bushels  W.  Wheat 

Black  Rock  Mills,  1,014        "        S. 

Erie  County,  N.  Y. 


1,678 


"F.  P.  Billings." 


Still  further  to  emphasize  the  independence  of  the  western  coun- 
try so  far  as  bread  was  concerned,  it  is  related  that  a  cargo  of  flour 
which  came  to  Chicago  for  sale  in  that  year  returned  without  find- 
ing a  purchaser.  From  this  time  forward  Chicago  has  been  an 
exporter  of  wheat  and  flour  as  well  as  of  meat  and  other  articles 
which  have  been  added  year  by  year.  The  increase  in  the  number 
of  commodities  exported  in  the  following  two  years,  as  well  as 
the  greater  number  of  firms  engaged  in  the  trade,  both  testify  to 
the  growing  interest  in  the  commerce  of  the  city  and  to  its  rapid 
expansion. 

In  1840  the  volume  of  this  trade  was  multiplied  nearly  seven 
times  over  the  preceding  year,  and  Walker  &  Co.  and  Newberry  & 
Dole,  who  had  nearly  monopolized  the  business  hitherto,  had  as 
competitors  Giles.  Williams  &  Co.,  B.  W.  Raymond,  Bristol  & 
Porter,  Payne  &  Norton,  Gurnee  &  Mattison,  and  others,  while  to 
the  meat  and  bread  shipments  were  added  tallow,  beans,  wool  (for 
the  first  time),  lead,  lard  and  flaxseed.  Another  great  increase  in 
this  trade  took  place  in  1841,  the  figures  for  that  year  being  50  per 
cent  in  excess  of  1840,  and  several  new  firms  appear  as  shippers. 


OF  THE  CITY  OF  CHICAGO  115 

Among  them  are  W.  W.  Saltonstall,  W.  L.  Whiting,  H.  Norton  & 
Co.,  G.  W.  Merrill,  Crawford  &  Harvey,  Dodge  &  Tucker,  Smith 
&  Webster,  and  others.  The  principal  articles  of  export  are,  as 
before,  wheat  and  meat,  but  among  other  commodities  not  pre- 
viously found  are,  corn  (1,781  bushels),  grass  seed  (33  bushels)  and 
butter. 

Again  in  1842  the  lake-borne  commerce  of  Chicago  nearly 
doubled,  and  for  the  first  time  shipments  of  wheat  exceeded  half  a 
million  bushels,  and  the  value  of  all  the  shipments  rose  to  $659,- 
305.20.  Of  this  total,  wheat  was  by  far  the  largest  item.  Beef  and 
pork  were  next  in  importance,  16,209  barrels  having  been  shipped 
during  the  year.  For  obvious  reasons  the  distributing  trade  of  the 
city  did  not  show  such  sensational  growth  as  its  outward  bound 
commerce.  It  had  assumed  respectable  proportions  before  any- 
thing was  exported  except  a  few  hides  and  a  little  beef  or  pork, 
and  it  kept  well  ahead  of  the  shipments  by  lake  until  1842,  when 
exports  and  imports  were  nearly  equal  to  each  other  in  value. 

So  far  as  known  to  the  writer,  there  is  no  list  of  the  dilTerent 
articles  of  merchandise  imported  at  Chicago  in  1842,  but  undoubt- 
edly it  comprised  nearly  everything  essential  to  the  life  of  a  civilized 
community,  except  the  food  produced  upon  Illinois  farms.  There 
was  enough  in  this  amazing  development  of  business  before  their 
eyes  to  justify  the  wildest  dreams  of  the  early  Chicago  enthusiasts 
in  the  year  1842.  Work  on  the  canal  was  about  to  cease,  the  State 
Bank  was  insolvent,  there  was  not  a  sound  bank  in  the  State  of 
Illinois,  there  was  almost  no  specie  in  circulation,  and  such  bank 
bills  as  served  for  currency  were  looked  upon  with  distrust  and 
accepted  only  at  a  heavy  discount ;  most  of  the  people  of  Chicago 
were  bankrupt.  The  credit  of  the  State  of  Illinois  had  been  ruined 
by  foolish  financial  experiments ;  its  bonds  were  selling  at  80  per 
cent  discount,  taxes  were  burdensome,  and  repudiation  was  threat- 
ened. And  yet  there  was  in  this  astonishing  commercial  expansion 
during  the  five  or  six  years  which  followed  the  panic  of  1837,  posi- 
tive assurance  that  when  a  method  could  be  found  by  which  the 
surplus  products  of  northern  Illinois  farms  could  reach  Chicago, 
there  would  be  a  development  of  the  city  far  exceeding  anything 
yet  witnessed.  Although  handicapped  by  the  want  of  good  roads 
to  the  interior  of  the  State,  and  for  several  months  in  the  winter 
completely  cut  off  from  all  means  of  transportation  to  the  East,  the 
commerce  of  the  little  city  had  grown,  until  in  1842  it  amounted  to 
more  than  a  million  and  a  quarter  of  dollars.  What  might  be  ex- 
pected when  the  completion  of  the  canal,  the  Galena  &  Chicago 
Railroad,  and  a  system  of  turnpikes  to  the  interior  should  bring 
the  surplus  of  the  great  State  to  the  warehouses  of  the  ambitious 
little  town ! 

Aside  from  their  implicit  faith  in  the  future  of  the  place  and 
their  indomitable  courage  in  the  face  of  great  difficulties,  the  mer- 


116  HISTORY  OF  THE  BOARD  OF  TRADE 

chants  of  Chicago,  relieved  by  the  bankrupt  court  from  an  incubus 
of  debt,  could  count  as  a  good,  tangible  asset,  on  the  1st  day  of 
January,  1843,  a  busy  city  of  more  than  7,000  people,  equipped  with 
all  appliances  for  handling  the  great  commerce  which  it  confidently 
expected.  Some  of  its  streets  were  bottomless,  but  the  farmers 
who  hauled  their  wheat  over  the  muddy  roads  leading  to  the  town, 
and  exchanged  it  for  dry  goods,  agricultural  implements  and  other 
merchandise,  didn't  mind  the  city  mud.  The  Lake  House,  built  in 
the  boom  days  of  1836,  furnished  first-class  accommodation  to  tour- 
ists ;  lines  of  stage  coaches  carried  mails  and  passengers,  over  such 
roads  as  there  were,  to  Detroit,  daily ;  to  Galena  via  Belvidere  and 
Apple  River,  semi-weekly ;  to  Milwaukee,  tri-weekly ;  to  Dixon's 
Ferry,  weekly ;  to  Ottawa  via  Joliet,  daily ;  to  Danville  and  Vin- 
cennes,  weekly. 

A  tri-weekly  line  of  steamboats  to  and  from  Buffalo,  during 
the  season  of  navigation,  afforded  luxurious  quarters  for  eastbound 
tourists,  and  carried  freight  at  reasonable  rates.  A  fleet  of  sailing 
vessels  brought  lumber  to  Chicago  from  St.  Joseph,  the  Kalamazoo 
River  and  Muskegon,  and  carried  supplies  for  the  lumber  camps  in 
return.  The  water  system  of  the  Chicago  Hydraulic  Company 
had  just  gone  into  operation  (May  24,  1842),  furnishing  an  ample 
supply  of  pure  water  which  was  distributed  through  wooden  service 
pipes.  The  city's  destiny  awaited  development  of  an  adequate  trans- 
portation system  to  the  interior. 


CHAPTER  III 
The  Modern  City 

EVERYONE  familiar  with  local  conditions  recognized  the  vital 
importance  of  the  Illinois  and  Michigan  Canal  to  the  city  of 
Chicago.  More  than  half  the  work  necessary  for  its  completion  had 
been  done  before  the  close  of  the  year  1842,  but  in  the  distressed 
condition  of  the  State  finances,  it  was  hopeless  to  look  in  that  direc- 
tion for  further  assistance.  Almost  equally  hopeless  was  the  pros- 
pect of  obtaining  anywhere  at  this  time  the  $4,000,000  needed  to 
finish  the  Canal  according  to  the  plans  which  had  been  followed 
thus  far.  The  State  had  become  so  deeply  involved  in  debt  that 
many  public  men  openly  advocated  repudiation  of  all  the  bonds. 
"The  two  leading  Whig  newspapers  of  the  State  boldly  took  ground 
that  the  debt  never  could  and  never  would  be  paid.  Very  many 
democrats  were  in  favor  of  the  same  course.  *  *  *  At  a  demo- 
cratic convention  which  nominated  Mr.  Snyder  for  governor,  a 
resolution  against  repudiation,  offered  by  Mr.  Arnold  of  Chicago, 
was  laid  on  the  table  *  *  *  so  as  not  to  commit  the  party  one 
way  or  the  other."     (Ford,  p.  291-292.) 

In  at  least  one  county  in  the  State,  the  people  refused  to  pay 
their  taxes.  Many  politicians  in  the  southern  part  of  the  State 
were  so  strongly  prejudiced  against  northern  men  that  they  op- 
posed the  Canal,  "for  fear  it  would  open  a  way  for  flooding  the 
State  with  Yankees."  (Ford,  p.  281.)  The  bonds  of  the  State  of 
Illinois  "were  selling  for  only  fourteen  cents  on  the  dollar."  (Ford, 
p.  300.) 

It  was  at  this  critical  time  that  William  B.  Ogden,  Justin  But- 
terfield  and  Isaac  N.  Arnold  of  Chicago,  and  Arthur  Bronson  of 
New  York  devised  a  plan  for  reorganization  of  the  affairs  of  the 
Canal,  which  became  a  law  February  21,  1843.  (Andreas,  vol.  1, 
p.  170.)  The  bill  was  prepared  by  Mr.  Butterfield,  and  provided 
that  the  holders  of  the  Canal  bonds  should  advance  $1,600,000  (the 
sum  reported  to  be  necessary  by  the  Chief  Engineer)  to  complete 
the  Canal,  "in  return  for  which,  the  State  was  to  convey  the  Canal 
property  in  trust,  to  secure  the  new  loan,  as  well  as  for  the  ultimate 
payment  of  the  whole  Canal  debt,  and  was  to  lay  some  moderate 
tax  to  pay  some  portion  of  the  accruing  interest  on  the  whole  debt." 
(Ford,  p.  297.) 

Michael  Ryan  and  Charles  Oakley  were  appointed  Commis- 
sioners to  negotiate  the  loan,  and  after  successfully  meeting  all 
the  objections  raised  by  the  foreign  bondholders,  they  at  least  par- 

117 


118  HISTORY  OF  THE  BOARD  OF  TRADE 

tially  succeeded  in  their  mission,  the  foreign  bondholders  agree- 
ing to  furnish  their  share  of  the  desired  loan,  provided,  an  expert 
investigation  should  substantiate  the  Commissioners'  statements. 

Still  another  difficulty  threatened  disaster.  The  amount  to  be 
obtained  by  the  new  loan  would  complete  the  Canal  only  on  what 
was  known  as  the  "shallow  cut"  plan,  and  this  required  a  supply 
of  water  for  the  summit  level  which  could  be  secured  only  by  mak- 
ing a  Canal  thirty  miles  in  length  from  Fox  River,  or  by  pumping 
water  from  the  Chicago  River.  The  latter  plan,  devised  by  Ira 
Miltimore,  a  Chicago  engineer,  was  adopted  and  work  was  begun 
upon  the  Canal  in  September,  1843,  although  little  progress  was 
made  until  1845. 

During  the  latter  part  of  the  winter  of  1842-43,  there  was  great 
depression  in  the  price  of  farm  products  in  Chicago,  the  Weekly 
Democrat  of  January  25,  1843,  giving  the  following  quotations, 
which  it  is  believed  are  the  lowest  record  for  most  of  the  com- 
modities, although  white  winter  wheat  is  reported  by  Andreas, 
vol.  I,  p.  153,  to  have  sold  at  38c  a  bushel  in  the  following  month, 
and  spring  wheat  sold  below  30  cents  in  1851. 

Pork $5.00@6.00  per  barrel. 

Lard 02@  .04  per  pound. 

Butter 06@  .08  per  pound. 

Flour 2.75@3.00  per  barrel  for  superfine. 

Winter  Wheat 42@  .44  per  bushel. 

Spring  Wheat 35@  .38  per  bushel. 

Corn  (shelled) 12@  .15  per  bushel. 

Potatoes 12@  .18  per  bushel. 

Turkeys 37@  .45  each. 

Ducks 12  each. 

Chickens 12@  .18  each. 

How  far  these  extremely  low  prices  were  due  to  the  general 
demoralization  of  the  finances  of  the  community,  and  how  far  to 
other  causes  not  now  apparent,  it  is  impossible  to  say,  but  the  fol- 
lowing table  of  the  "Money  Market,"  furnished  by  George  Smith 
&  Co.,  Private  Bankers  and  Exchange  Brokers  for  the  Weekly 
Democrat  of  January  25th,  1843,  gives  some  idea  of  the  troubles 
of  the  merchants  in  those  days. 

Specie par 

Illinois 60  percent  discount 

Bank  of  Illinois 60  percent  discount 

Indiana .3@5  percent  discount 

Farmers  &  Mechanics  Bank  of  Michigan.  ..3@5  percent  discount 
Wisconsin  Marine  &  Fire  Insurance  Co.,  ck.       2  percent  discount 

Missouri 3@5  percent  discount 

Canal  Scrip 80  percent  discount 


OF  THE  CITY  OF  CHICAGO  119 

County  Orders 65  percent  discount 

City  Scrip 12i/2  percent  discount 

Bank  of  Cairo no  sale 

Bank  of  Michigan no  sale 

Bank  of  Mineral  Point no  sale 

Miners  Bank  of  Dubuque no  sale 

In  other  words,  all  bank  bills,  scrip  and  other  certificates  used 
as  currency,  and  legally  issued  by  the  City,  County  or  State,  could 
be  converted  into  real  money  only  by  submitting  to  discounts,  rang- 
ing from  12^  per  cent  to  80  per  cent.  The  bills  of  some  Michigan, 
Indiana  and  Missouri  banks  could  be  sold  at  3%@5%  discount, 
while  certificates  of  deposit  issued  by  the  Wisconsin  Marine  and 
Fire  Insurance  Company  of  Milwaukee,  a  corporation  which  had 
no  legal  right  to  issue  currency,  but  in  the  integrity  and  ability  of 
whose  management  the  community  had  confidence,  were  almost 
as  good  as  gold. 

George  Smith,  whose  table  of  the  "money  market"  appears 
above,  was  the  president  and  directing  spirit  of  this  Insurance 
Company,  whose  illegal  certificates  of  deposit  for  nearly  a  dozen 
years,  furnished  Chicago  and  vicinity  almosc  t'iC  only  paper  cur- 
rency which  was  redeemed  in  specie  upon  presentation.  He  made  a 
great  fortune  for  hiniself,  and  at  the  same  time  rendered  a  signal 
service  to  the  growing  city.  He  was  a  young  Scotchman  who  ar- 
rived in  1833,  and  who  brought  a  capital  of  $25,000,  with  which  he 
speculated  successfully  in  real  estate  for  a  time.  Perhaps  he  had 
the  foresight  or  the  good  fortune  to  sell  his  holdings  before  the 
panic  of  1837.  At  all  events,  he  was  one  of  the  few  who  escaped 
bankruptcy  in  that  financial  cyclone,  and  in  1839,  he  with  his  as- 
sociates, Strachan  &  Scott,  obtained  from  the  Territorial  Legis- 
lature of  Wisconsin  a  charter  incorporating  the  Wisconsin  Marine 
and  Fire  Insurance  Company.  This  charter  was  a  copy,  with  un- 
important changes,  of  the  charter  given  by  the  Illinois  Legisla- 
ture to  the  Chicago  Marine  and  Fire  Insurance  Company  in  1836-7, 
under  which,  notwithstanding  the  provision  prohibiting  the  com- 
pany from  doing  a  banking  business,  the  Chicago  Marine  and  Fire 
Insurance  Company  had,  after  the  panic,  issued  certificates  of  de- 
posit, which  for  lack  of  circulating  medium,  were  used  as  a  cur- 
rency. Doubtless  this  issue  of  "certificates,"  although  never  very 
large  in  amount,  suggested  to  George  Smith  the  feasibility  of  sup- 
plying the  community  with  a  circulating  medium  which  in  the  na- 
ture of  things  rested  solely  on  the  confidence  of  the  people  in  him- 
self and  his  associates.  Another  Scotchman,  Alexander  Mitchell, 
came  to  Milwaukee,  and  settled  there  as  Secretary  and  local  manager 
of  the  Wisconsin  Marine  and  Fire  Insurance  Company,  and  by  hon- 
est and  conservative  banking  methods,  and  against  the  bitter  en- 
mity of  the  rotten  banks  operating  under  legal  authority,  this  in- 


120  HISTORY  OF  THE  BOARD  OF  TRADE 

surance  company  gradually  established  its  credit  until  in  1851  its 
certificates  in  circulation  amounted  to  nearly  one  and  a  half  million 
dollars,  all  of  which  was  paid  upon  presentation  after  contributing 
greatly  to  the  prosperity  of  Chicago  during  the  decade  1841-1851, 
when  no  other  good  currency  was  available. 

The  Chicago  Democrat  of  October  11th,  1843,  copies  an  item 
from  the  Buflfalo  Economist  which,  speaking  of  Chicago  wheat, 
says,  "We  all  know  its  good  quality,  but  there  is  some  poor  raised 
there,  and  some  farmers  are  less  careful  than  others  to  keep  their 
grain  clean.  If  good  and  bad,  sand  and  clay,  are  all  thrown  into 
a  vessel's  hold  together,  it  cannot  be  very  satisfactory  to  those 
who  buy  the  cargo  for  good  clean  wheat."  The  Democrat  adds, 
"There  can  be  no  doubt  but  the  course  of  our  merchants  and  for- 
warders in  mixing  various  kinds  of  wheat  has  injured  our  farm- 
ers much  by  keeping  the  price  down." 

The  same  issue  of  the  Democrat,  commenting  upon  a  report 

in  the  Galena  Gazette  that  "business  has  fallen  off"  in  Chicago, 

says,  "Chicago  trade  is  better  now  than  it  was  last  season ;     *     * 

*     Chicago  is  the  best  wheat  and  pork  market  in  the  United 

States,  and  always  will  be." 

The  year  1843  was  not  an  eventful  one  in  the  history  of  Chi- 
cago, aside  from  the  discontinuance  of  work  on  the  Canal  in  March, 
and  its  resumption  on  a  small  scale  in  September,  after  the  re- 
organization to  which  reference  has  been  made.  There  was  a 
steady  growth  in  population,  and  another  astonishing  increase  in 
the  commerce  of  the  city,  the  imports  by  lake  reaching  $1,435,- 
886.70,  and  the  exports  of  farm  products,  including  flour,  amount- 
ing to  $1,008,207.94.  But  the  lesson  of  the  panic  was  not  forgotten, 
only  a  little  more  than  $100,000  of  the  Wisconsin  Marine  and  Fire 
Insurance  Company's  certificates  were  in  circulation,  specie  was 
scarce,  and  of  the  600,000  acres  of  public  land  offered  for  sale  by 
the  government  at  Chicago  on  the  3rd  of  February,  only  70,000 
acres  found  purchasers. 

An  important  aid  to  the  commercial  community  was  the  inaugu- 
ration of  tri-weekly  express  service  between  Chicago  and  the  East, 
on  the  3rd  of  April,  1843.  Miller  &  Co.  started  this  line,  and  its 
success  justified  its  increase  to  a  daily  line  in  1845. 

The  year  1844  was  the  first  year  after  the  panic  in  which  the 
growth  of  the  city  was  at  all  phenomenal,  the  increase  as  shown 
by  the  census  of  1845  being  about  50  per  cent.  The  outward  bound 
commerce  fell  off  slightly,  but  the  imports  increased  about  as  much, 
so  that  the  total  trade  of  the  city  showed  little  change  from  the 
preceding  year,  when  its  volume  approached  two  and  a  half  millions. 
There  was,  however,  a  decided  revival  of  courage  and  confidence  on 
the  part  of  everybody,  property  values  rose,  meetings  were  held 
in  the  interest  of  good  roads,  new  school  buildings  and  other  public 
improvements,  and  on  the  10th  of  September,  at  a  meeting  held  in 


OF  THE  CITY  OF  CHICAGO  121 

the  "Council  room  for  the  purpose  of  electing  delegates  to  attend  a 
meeting  at  Elgin  in  the  interest  of  building  a  macadamized  or  plank 
road  from  the  Fox  and  Rock  Rivers  to  Chicago,  it  was  resolved 
that  the  commercial  prosperity  of  Chicago  mainly  depends  upon 
the  improvement  of  the  roads  leading  from  it  to  the  heart  of  the 
rich  agricultural  regions  by  which  it  is  surrounded."  (Andreas, 
vol.  I,  p.  153). 

The  meeting  was  held  in  Elgin  on  the  12th  of  September,  and 
in  the  resolutions  in  favor  of  a  plank  road  and  selecting  committees 
to  prepare  estimates  of  the  cost  of  the  same,  they  incorporated  the 
following  preamble,  viz. : 

"Whereas,  The  large  and  increasing  amount  of  agricultural 
products  yielded  by  the  fertile  soil  of  Illinois,  even  in  the  present 
beginning  of  its  cultivation,  which  requires  transportation  from  the 
Fox  and  Rock  River  valleys  to  the  City  of  Chicago,  with  the  vast 
and  equally  increasing  amount  of  merchandise,  lumber,  iron,  salt, 
etc.,  rendered  necessary  from  the  city  to  the  country,  call  urgently 
for  some  better  thoroughfare  than  is  now  possessed  between  the 
above  named  places,  therefore,  resolved,  etc."  (Chicago  Weekly 
Democrat,  Sept.  18,  1844.) 

Evidently  the  farmers  were  as  anxious  for  "good  roads"  as  the 
city  people,  and  well  they  might  be,  when  the  proceeds  of  a  wagon 
load  of  wheat  hauled  60  miles  was  consumed  in  expense  of  feed 
for  the  team,  wear  and  tear  of  team  and  wagon  and  wages  of  driver, 
even  if  the  latter  had  no  shelter  at  night  except  his  wagon  box,  and 
lived  on  pork  and  dry  bread. 

That  there  was  urgent  necessity  for  better  roads  is  indicated 
by  the  Chicago  Evening  Journal  which,  in  its  market  review  of 
December  12,  1844,  says,  "Wheat  and  pork  remain  at  our  yester- 
day's quotation — there  is  but  little  coming  in.  The  roads  are  al- 
most impassable  for  loaded  teams,"  and  in  its  "city  items"  remarks 
that  "our  merchants  are  eagerly  looking  for  a  fall  of  snow." 

So  great  was  the  influx  of  population  that  more  than  six 
hundred  new  buildings  were  erected  in  1844.  Chicago  had  "ar- 
rived." What  was  only  a  promising  "prospect"  ten  years  earlier 
was  now  a  developed  mine  yielding  good  dividends,  and  with  rich 
lodes  visible  in  a  hundred  directions  awaiting  development. 

The  first  permanent  public  school  building  in  Chicago  was  be- 
gun in  1844  and  completed  in  March,  1845,  at  a  cost  of  $7,500.  It 
stood  on  the  north  side  of  Madison  Street,  opposite  the  present  site 
of  McVicker's  Theatre.  There  was  strenuous  opposition  to  the 
erection  of  so  large  and  expensive  a  building  for  school  purposes, 
and  Mayor  Garrett,  in  his  inaugural  address  delivered  about  the 
time  it  was  finished,  "recommended  that  it  be  either  sold  or  con- 
verted into  an  insane  asylum."  (Andreas,  vol.  1,  p.  211.)  The 
"Kickers,"  of  whom  there  were  many,  dubbed  it  Miltimore's  Folly, 
because  Ira  Miltimore,  the  engineer  who  built  the  first  water  works. 


122  HISTORY  OF  THE  BOARD  OF  TRADE 

and  devised  the  method  of  supplying  the  summit  level  of  the  Canal 
with  water  pumped  from  the  South  Branch  of  the  Chicago  River, 
had,  as  Chairman  of  the  Council  Committee  on  Schools,  been  in- 
strumental in  having  this  school  house  built.  Dr.  Josiah  C.  Good- 
hue, one  of  the  first  aldermen  from  the  1st  Ward,  and  J.  Young 
Scammon,  share  the  credit  for  the  permanent  establishment  in 
1840  of  the  public  school  system  in  Chicago.  Prior  to  the  building 
of  the  school  on  Madison  Street,  above  mentioned,  it  was  custom- 
ary for  the  School  Inspectors  to  hire  rooms  for  school  purposes, 
the  only  exception  to  this  practice  being  an  offer  made  by  the  in- 
spectors in  1842  to  furnish  materials  for  a  school  house  in  the 
"Dutch  Settlement"  on  the  North  Side,  provided  the  inhabitants 
would  erect  the  building  themselves.  This  offer  was  accepted  by 
the  District  and  the  Inspectors  furnished  materials  to  the  value 
of  $21 1.02. 

Soon  after  the  erection  of  the  first  permanent  public  school 
building,  the  Roman  Catholics  laid  the  foundation  of  a  college  and 
seminary  (October  17,  1845)  to  be  a  part  of  "The  University  of 
St.  Mary's  of  the  Lake,"  which  the  Legislature  had  incorporated 
on  the  19th  of  the  preceding  December. 

Nearly  all  the  leading  bodies  of  Christians  had  organizations 
and  many  of  them  church  buildings  in  Chicago  at  this  time,  the 
Catholics  having,  in  1843,  replaced  the  wooden  St.  Mary's  Church, 
built  on  Lake  and  State  Streets,  and  later  removed  to  the  southwest 
corner  of  Madison  and  Wabash  Avenue,  with  a  brick  edifice  costing 
$4,000. 

The  Episcopalians  had  occupied  since  1837  the  first  brick  church 
built  in  Chicago,  which  cost,  including  furnishings,  more  than  $15,- 
000,  and  in  August,  1844,  they  built  another  church  on  Madison 
Street  between  Clark  and  La  Salle. 

The  Presbyterians,  the  Baptists  and  Methodists  each  had  two 
churches ;  the  Universalists  and  Unitarians  each  one. 

Chicago  could  boast  at  this  time  at  least  two  good  hotels,  the 
Lake  House  and  the  Tremont ;  two  daily  newspapers,  "The  Demo- 
crat" and  "The  Journal;"  a  monthly  "Medical  and  Surgical  Jour- 
nal" begun  in  April,  1844,  in  the  interest  of  the  newly  established 
"Rush  Medical  College,"  which  was  chartered  in  1837,  but  not 
organized  until  December,  1843,  when  the  first  course  of  lectures 
was  given ;  organizations  of  Masons,  Odd  Fellows,  and  other  secret 
societies,  as  well  as  social  organizations.  The  Young  Men's  Associ- 
ation, which  afterwards  became  the  Chicago  Library  Association, 
and  foreshadowed  the  Public  Library  of  later  days ;  The  Chicago 
Bible  Society,  a  Mechanics  Institute,  and  a  theatre.  There  is  abun- 
dant evidence  that,  engrossed  as  they  were  in  thoughts  of  the  ma- 
terial things  of  life,  early  Chicago  people  knew  of  a  world  in  which 
pork  and  wheat  and  lumber  and  drygoods  were  not  the  only  things 
of  value.    Still  they  were  the  basis  of  existence,  and  while  the  fig- 


OF  THE  CITY  OF  CHICAGO  123 

Tires  show  steady  growth,  the  increasing  number  of  wholesale  firms 
in  new  lines  of  business  attest  the  profitable  nature  of  the  city's 
commerce.  Another  noticeable  feature  of  the  Chicago  newspapers 
about  this  time  is  the  appearance  of  advertisements  of  Detroit, 
Buffalo,  Boston  and  New  York  business  houses,  a  sure  indication 
that  Chicago's  trade  was  already  large  enough  to  stimulate  com- 
petition among  eastern  firms  who  sought  to  profit  by  it. 

Among  the  new  firms  which  seek  the  wholesale  trade  through 
advertising  columns  of  the  newspapers  in  1844  and  1845,  are : 

Bracken  &  Fuller,  Wholesale  and  Retail  Dry  Goods  and  Gro- 
ceries. 

C.  Follansbee,  Wholesale  and  Retail  Dealer  in  Groceries, 
Liquors  and  Provisions. 

L.  P.  Sanger  &  Co.,  Manufacturers,  Wholesale  and  Retail 
Dealers  in  Hats,  Caps,  Furs,  etc. 

E.  S.  &  J.  Wadsoworth  (Democrat  March  6,  1844),  Dealers  in 
Dry  Goods  at  Wholesale. 

Messrs.  Wadsworth  announce  that  they  have  made  arrange- 
ments for  weekly  arrivals  at  their  store  in  Peru,  111.,  of  Sugar  and 
Molasses  direct  from  New  Orleans,  which  they  offer  at  Chicago  or 
Peru,  as  desired. 

John  King,  Jr.  &  Co.,  Dry  Goods,  Groceries,  &c..  Wholesale  and 
Retail. 

Nathaniel  Pitkin  offers  Sheetings,  Wholesale  and  Retail. 

H.  Miller,  Manufacturer  of  Fine  Cut  and  Smoking  Tobacco, 
Snuff  and  Segars,  offers  to  supply  "Merchants  at  New  York 
prices." 

Dyer  and  Chapin,  Dry  Goods,  Groceries,  &c.,  Wholesale  or 
Retail.  They  also  offer  as  Agents  for  the  manufacturers,  a  con- 
signment of  Broadcloths,  Satinnets  and  Cassimeres. 

A.  G.  Burley  &  Co.,  Importers  and  Dealers  in  China,  Glass, 
Earthenware,  at  Wholesale  and  Retail. 

W.  L.  Whiting  offers  a  consignment  of  Printing  Paper. 

N.  &  F.  Tuttle,  Wholesale  and  Retail  Dealers  in  Dry  Goods, 
Groceries,  Hardware,  etc. 

J.  H.  Dunham  (Democrat,  July  23,  1844),  Wholesale  Grocer 
and  Commission  Merchant. 

Henshaw  &  Shaw,  Wholesale  Grocers  and  Commission  Mer- 
chants. 

J.  B.  Doggett,  Agent  for  the  Brownsville  Juniata  Iron  Works, 
Iron,  Nails,  Spikes,  &c. 

W.  W.  Barlow  &  Co.,  Wholesale  and  Retail  Bookstore. 

Ryerson  &  Blaikie,  Iron,  Steel,  Nails,  Glass,  Whitelead,  &c. 
(Evidently  agents  for  the  Hecla  Works  of  Pittsburgh.) 

B.  W.  Raymond,  Commission  House  for  Sales  of  American 
manufactured  Cotton  and  Woolen  goods. 

Scoville  &  Gates,  Plough  Manufactory  and  Machine  Shop. 


124  HISTORY  OF  THE  BOARD  OF  TRADE 

Pierce  &  Whitbeck,  Plough  Factory. 

E.  L.  Sherman,  Lard  Oil  Works. 

R.  J.  Cunningham  &  Co.,  offer  Cut  Stone  from  their  Stone 
Quarry  at  Joliet. 

In  the  Chicago  Directory  for  1845-6,  nearly  all  the  merchants 
who  advertise  Books  &  Stationery,  Dry  Goods,  Groceries,  Boots 
and  Shoes,  etc.,  appeal  to  the  wholesale  trade  as  well  as  retail,  among 
those  not  heretofore  mentioned  being, 

J.  Beecher,  Wholesale  and  Retail  Dealer  in  Leather,  Boots, 
Shoes,  Fndings,  etc. 

C.  B.  &  W.  Blair,  Wholesale  and  Retail  Dealers  in  Cooking  and 
Parlor  Stoves,  Tin  Plate,  Sheet  Iron,  Copper,  &c. 

But  in  the  classified  business  directory  for  1846,  while  J.  H. 
Dunham,  and  Henshaw  &  Shaw  advertise  as  Wholesale  Grocers 
exclusively,  and  T.  B.  Carter  &  Co.  and  others,  confine  themselves 
to  the  line  of  Dry  and  Fancy  Goods,  no  Dry  Goods  Merchant  has 
the  assurance  to  announce  his  firm  as  exclusively  a  Wholesale 
house.  Hamilton  &  White,  and  Hamlin,  Day  &  Warner,  appear 
under  the  head  of  "Dry  Goods  and  Groceries." 

Beef  and  pork  packing  continued  to  hold  first  place  in  the 
manufacturing  industries  of  the  City,  although  far  exceeded  in 
value  by  wheat  in  the  list  of  shipments  by  lake  to  eastern  mar- 
kets. It  is  claimed  that  Wadsworth  &  Dyer  in  the  winter  of  1844- 
5,  packed  the  first  beef  put  up  in  tierces  for  the  English  market. 
(Andreas,  vol.  I,  p.  562.)  It  was  so  well  received  that  their  Eng- 
lish consignees  reported  to  them  that  "their  beef  will  compete  suc- 
cessfully with  the  best  Irish  brands."  (See  Daily  Democrat,  Sep- 
tember 26,  1848.)  The  outward  bound  shipments  nearly  doubled 
in  1845,  while  the  receipts  by  lake  showed  only  about  20  per  cent 
increase.  The  total  import  and  export  trade  however  amounted  to 
more  than  three  and  a  half  million  dollars.  During  the  autumn 
of  this  year  the  Canal  Engineer  completed  his  preliminary  work, 
and  in  the  following  year  the  French  and  English  bondholders,  as 
well  as  those  in  the  United  States  paid  their  subscriptions  to  the 
loan  negotiated  in  1843,  and  excavation  was  prosecuted  with  vigor. 
Doubtless  the  splendid  increase  in  the  City's  trade  during  the  early 
'40's  had  much  to  do  with  the  willingness  of  the  bondholders  to 
"send  good  money  after  bad."  Without  this  incentive  they  might 
have  been  unwilling  to  make  any  further  advances  to  an  enterprise 
which  at  one  time  looked  almost  hopeless. 

The  people  of  Chicago  were  alive  to  the  necessity  of  railroad 
communication  with  the  East  as  well  as  the  West,  and  the  Chicago 
Weekly  Democrat  of  April  9,  1845,  announced  that  the  Michigan 
Central  Railroad  "would  be  in  full  blast  to  Kalamazoo,  the  en- 
suing summer.  When  the  last  link  is  completed  (to  St.  Joseph) 
the  journey  can  be  made  from  Boston  to  Chicago  in  84  hours,  as 
follows : 


OF  THE  CITY  OF  CHICAGO  125 

From  Boston  to  Albany 12  hours 

From  Albany  to  Buffalo 24  hours 

From  Buffalo   to   Detroit 30  hours 

From  Detroit  to  St.  Joseph 12  hours 

From  St.   Joseph   to   Chicago 6  hours 

Notwithstanding  its  pre-eminent  natural  advantages,  Chicago 
had  to  fight  for  its  "place  in  the  sun."  Before  the  town  was  incor- 
porated in  1833,  when  it  had  no  harbor,  no  commerce,  no  accumu- 
lated capital,  and  only  100  or  150  inhabitants  including  "half-breeds, 
quarter  breeds,  and  men  of  no  breed  at  all,"  as  Charles  Joseph 
Latrobe,  an  English  traveler  described  them  (Hurlbut,  p.  215),  St. 
Louis  was  a  wealthy  city  of  about  ten  thousand  people,  the  metrop- 
olis of  the  West,  in  complete  control  of  the  vast  and  profitable  com- 
merce of  the  Mississippi,  Ohio,  Missouri  and  other  western  rivers. 
Southern  and  Central  Illinois  marketed  the  produce  of  their  farms 
at  St.  Louis  and  bought  their'  merchandise  there.  Lead  mining 
at  Galena  was  controlled  by  St.  Louis  capital,  and  the  effort  of 
the  State  Bank,  under  the  control  of  Thomas  Mather  and  his  as- 
sociates in  1835-1837,  to  divert  this  business  to  Alton,  and  the 
losses  incurred  in  this  reckless  attempt,  contributed  in  considerable 
measure  to  the  downfall  of  that  bank,  and  the  consequent  disgrace- 
ful collapse  in  the  credit  of  the  State  of  Illinois. 

The  interest  of  St.  Louis  merchants,  and  of  the  people  of  the 
southern  and  central  parts  of  Illinois,  called  for  development  of 
roadways  leading  to  St.  Louis  rather  than  to  Chicago;  and  only 
by  offering  superior  inducements  could  Chicago  merchants  hope 
to  capture  the  trade  of  their  own  State  and  divert  it  from  its  well- 
worn  channels  leading  to  the  great  emporium  of  the  Mississippi 
Valley. 

In  the  fall  of  1845,  the  completion  of  the  Canal  within  two  or 
three  years  was  assured,  and  the  enterprising  residents  of  Chicago 
turned  their  attention  to  the  Galena  and  Chicago  Union  Railroad, 
which  it  will  be  remembered,  was  chartered  January  16,  1836,  but 
succumbed  to  the  financial  difficulties  which  overwhelmed  the 
people  of  Illinois  soon  afterwards.  No  work  of  any  consequence 
was  done  upon  this  projected  road  for  ten  years,  but  in  January, 
1846,  a  great  convention  at  Rockford  attended  by  319  delegates 
from  all  the  counties  on  the  line  of  the  road,  revived  the  enterprise 
and  adopted  measures  looking  to  the  resumption  of  work.  The 
charter  of  the  road,  with  such  land  and  other  property  as  it  had, 
was  purchased  from  Townsend  and  Mather  for  $20,000  in  full- 
paid  stock  of  the  Company,  and  towards  the  close  of  the  year  1846, 
the  Directors  of  the  Company  subscribed  towards  the  expense  of 
a  survey. 

William  B.  Ogden  and  J.  Young  Scammon  were  most  active 
in  furthering  the  project,  but  when  they  solicited  subscriptions  to 


126  HISTORY  OF  THE  BOARD  OF  TRADE 

the  stock  of  the  Company  in  the  following  August  (1847),  they 
succeeded  in  obtaining  the  promise  of  only  $20,000  in  the  City  of 
Chicago.  "Some  merchants  opposed  the  scheme,  fearing  it  would 
take  the  sale  of  goods  from  Chicago  to  points  on  the  line  of  the 
road."  (Andreas,  vol  I,  p.  247),  and  the  Common  Council  refused 
to  grant  the  railroad  right  of  way  into  the  City,  and  would  only 
give  a  permit  to  lay  a  temporary  track  to  the  river,  so  that  one  of 
the  two  engines  which  the  directors  had  bought,  could  be  unloaded 
and  run  out  to  the  city  limits,  then  at  Halsted  and  Kinzie  Streets. 

In  marked  contrast  with  the  apathy  in  Chicago,  was  the  en- 
thusiasm in  the  country.  In  the  fall  of  1847  Mr.  Ogden  and  Mr. 
Scammon  traveled  over  the  entire  line  from  Chicago  to  Galena, 
stopping  at  all  the  principal  points,  addressing  public  meetings  and 
soliciting  subscriptions  to  the  stock  of  the  company.  Farmers  and 
others  subscribed  liberally,  and  even  the  farmers'  wives  put  the 
proceeds  of  their  butter  and  other  household  productions  into  rail- 
road stock,  often  at  much  sacrifice  of  personal  comfort. 

Charles  Walker,  Isaac  N.  Arnold,  John  B.  Turner  and  John 
L.  Scripps  also  traveled  over  the  line  soliciting  subscriptions. 
Enough  promises  were  secured  during  the  fall  of  1847  to  warrant 
the  officers  of  the  Company  in  letting  contracts  for  the  first  seven 
miles  west  of  Chicago,  and  organizing  a  corps  of  engineers  to 
locate  the  line  as  far  as  Fox  River;  and  on  the  1st  of  March,  1848, 
they  let  contracts  for  grading  and  bridging  25  miles  more,  the  con- 
tracts providing  that  the  first  sixteen  miles  from  Chicago  should  be 
finished  August  1,  1848,  and  the  remaining  sixteen  miles,  October 
1,  1848. 

The  years  1846  and  1847  were  years  of  steady  and  rapid,  but 
not  phenomenal  growth  in  population,  nearly  five  thousand  being 
added  in  the  two  years,  or  say,  40  per  cent,  of  the  number  reported 
in  1845. 

Commerce  increased  in  about  the  same  proportion  as  popu- 
lation, the  total  exports  for  1847  being  $2,296,299,  about  49  per 
cent  increase  in  two  years.  Included  in  this  total  were  1,974,304 
bushels  of  wheat,  32,538  barrels  of  flour,  and  48,920  barrels  of  beef 
and  pork. 

The  imports  at  Chicago  in  1847  showed  an  increase  of  29  per 
cent,  over  the  corresponding  figures  for  1845,  the  total  amount  be- 
ing $2,641,852.52,  and  the  total  exports  and  imports,  therefore,  for 
the  year  having  a  value  of  nearly  five  million  dollars,  and  showing 
an  increase  in  the  total  commerce  of  the  City  in  two  years  of  38 
per  cent. 

The  following  tables  give  a  good  idea  of  the  trade  of  the  city 
during  the  year  prior  to  the  opening  of  the  Illinois  and  Michigan 
Canal,  and  before  the  first  railroad  line  was  built. 


OF  THE  CITY  OF  CHICAGO  127 

Imports. 

Dry  Goods   $  837,451.22 

Groceries   506,027.56 

Hardware    148,811.50 

Iron  and   Nails 88,275.50 

Stoves  and  Hollowware 68,612.00 

Crockery    30,505.00 

Boots   and    Shoes 94,275.00 

Hats,  Caps  and  Furs 68,200.00 

Jewelry,  &c 51,000.00 

Books   and    Stationery 43,580.00 

Printing  Paper 7,284.11 

Presses,  Type  and  Printing  Material 7,432.50 

Drugs  and  Medicines 92,081.41 

Paints  and  Oils 25,460.00 

Liquors  86,334.67 

Tobacco  and  Cigars 3,716.00 

Ship  Chandlery  23,000.00 

Tools  and  Hardware 15,000.00 

Furniture  Trimming  5,564.07 

Glass   8,949.24 

Scales  4,044.55 

Coaches,  &c 1,500.00 

Looking  Glasses,  &c 2,500.00 

Marble   800.00 

Oysters   2,500.00 

Sportsmen's  Articles    2,000.00 

Musical  Instruments   6,426.00 

Machinery,  &c 30,000.00 

Lumber,  Timber,  Shingles,  Staves,  &c 265,332.50 

Salt,  Coal,  Iron,  Fish,  Waterlime,  &c 117,210.29 

Total    $2,641,852.52 

(Note.    There  is  an  error  of  $2,020  in  addition,  but  the  figures 
given  by  Andreas  have  been  followed.) 

Exports  (Quantities.) 

Wheat,  bushels    $1,974,304 

Flour,  barrels   32,598 

Corn,  bushels    67,315 

Oats,  bushels 38,892 

Beef,  barrels   25,504 

Pork,   barrels    22,416 

Hams  and  Shoulders 47,248 

Tallow,  pounds 208,435 


128  HISTORY  OF  THE  BOARD  OF  TRADE 

Butter,  pounds   $   47,536 

Beans,  bushels    440 

Wool,  pounds  411,088 

Tobacco,  pounds 28,423 

Lard,  pounds 139,069 

Leather,   pounds    2,740 

Beeswax,  pounds   5,390 

Oil,  gallons    8,793 

Lead,  pounds    10,254 

Hemp,   pounds    6,521 

Flax  Seed,  bushels 2,262 

Mustard  Seed,  bushels 520 

Timothy  Seed,  bushels 536 

Hay,  tons  415 

Cranberries,  bushels    250 

Buffalo   Robes,   bales 60 

Dry  Hides  8,774 

Deer  Skins,  pounds 28,259 

Sheep  Pelts   1,133 

Furs,  packages  278 

Ginseng,  pounds 3,625 

Ashes,  barrels   16 

Bristles,  pounds    4,548 

Glue,  pounds   2,480 

Brooms    3,168 

Whitefish,  barrels    1,229 

Barley,  bushels   400 

Total  value   $2,296,299 

The  table  of  imports  does  not  include  goods  landed  in  Chicago 
for  merchants  in  the  interior,  nor  does  the  table  of  exports  include 
supplies  sent  by  lake  to  the  lumber  and  mining  regions  in  Michigan 
and  Wisconsin. 

"Previous  to  1846  Chicago  was  a  port  of  delivery  only,  and  be- 
longed to  the  Collection  District  of  Detroit ;"  but  on  the  16th  of 
July,  1846,  Congress  established  the  Collection  District  of  Chi- 
cago, to  include  all  the  western  shore  of  Lake  Michigan  from  the 
Indiana  line  "northward  to,  and  including  the  town  and  River 
Sheboygan,  which  are  in  the  territory  of  Wisconsin."  (Colbert, 
p.  63.) 

President  Polk  sent  a  special  message  to  Congress  May  11, 
1846,  announcing  that  "a  state  of  war  exists"  by  act  of  the  Republic 
of  Mexico.  General  Taylor's  little  army  of  occupation  had  been 
attacked  by  a  superior  Mexican  force  at  Palo  Alto  three  days  be- 
fore, and  won  a  victory,  which  was  made  more  decisive  on  the  fol- 
lowing day  at  Resaca  de  la  Palma. 


OF  THE  CITY  OF  CHICAGO  129 

The  news  of  the  action  of  Congress  reached  Chicago  about  the 
20th  of  May,  and  soon  thereafter,  in  response  to  the  proclamation  of 
Governor  Ford,  two  companies  of  volunteers  were  raised  in  the 
City,  both  of  which,  about  June  10th,  were  mustered  into  the 
United  States  service  in  the  famous  First  Illinois  Regiment,  com- 
manded by  Colonel  John  J.  Hardin.  These  companies  were  under 
command  of  Captains  Lyman,  Mower  and  Elisha  Wells,  respec- 
tively, and  with  their  regiment  were  soon  at  the  front,  where  they 
did  good  service  for  their  country. 

Many  men  were  recruited  in  Chicago  for  the  regular  army, 
more  than  100  it  is  said  by  Captain  C.  C.  Sibley.  A  company  of 
cavalry,  known  as  the  Chicago  Horse  Company,  raised  by  Colonel 
Richard  J.  Hamilton,  was  accepted  as  infantry,  and  it  has  been  esti- 
mated that  Chicago  and  Cook  County  furnished  in  all,  about  790 
men  during  the  Mexican  War,  all  of  whom  served  with  credit  to 
themselves  and  to  the  State.  None  of  them  appears  to  have  won 
great  military  renown,  but  Murray  F.  Tuley  who  was  First  Lieu- 
tenant of  the  "Chicago  Horse  Company"  above  referred  to,  and 
Corporal  Charles  C.  P.  Holden  of  the  same  Company  attained  dis- 
tinction in  civil  life  in  after  years,  the  former  as  an  upright  Judge 
of  the  Circuit  Court  of  Cook  County,  and  the  latter  as  a  member 
of  the  Common  Council,  and  its  President  at  the  time  of  the  Great 
Fire  in  1871. 

Congress  had  made  small  appropriations  for  improvement  of 
the  Chicago  River  and  Harbor,  in  1833,  1834,  1835,  1836,  1837,  1838, 
1839,  1842  (Report  of  Hon.  J.  B.  Thomas,  Fergus  Historical  Series, 
No.  18,  p.  192),  and  in  1846  an  item  for  further  work  upon  the  same 
was  included  in  the  appropriation  bill  which  was  vetoed  by  Presi- 
dent Polk.  Great  indignation  was  aroused  in  Chicago  by  this  ac- 
tion', and  the  people  determined  to  call  a  convention  to  meet  in 
Chicago  in  July,  1847,  to  express  their  views  on  the  needs  of  the 
Western  States,  and  to  demand  from  the  Government  adequate 
facilities  for  the  great  commerce  already  pouring  into  Chicago,  and 
the  far  greater  traffic  which  the  rapid  settlement  of  the  West  ren- 
dered certain  in  the  near  future. 

To  Mr.  William  M.  Hall,  agent  at  St.  Louis,  of  the  Lake  Steam- 
boat Association,  is  due  the  credit  of  initiating  the  propaganda 
which  enlisted  the  support  of  the  principal  commercial  men  in 
Detroit,  Buffalo,  Boston,  Springfield  and  New  York,  as  well  as 
those  in  Chicago.  The  Chicago  members  of  the  Committee  of  Ar- 
rangements, William  B.  Ogden,  S.  Lisle  Smith,  and  George  W. 
Dole  deserve  great  credit  for  keeping  the  convention  free  from  all 
appearance  of  partisanship,  and  making  it  a  gathering  representative 
of  the  Western  States  rather  than  of  the  city  of  Chicago  alone. 
Hon.  Edward  Bates  of  St.  Louis  was  elected  chairman  of  the  Con- 
vention, and  among  the  twenty  thousand  people  who  were  in  at- 
tendance, were  the  leading  men  from   New   England,   New  York, 


130  HISTORY  OF  THE  BOARD  OF  TRADE 

Pennsylvania,  New  Jersey,  Georgia,  Florida,  Kentucky,  and  all  the 
Western  States  north  of  the  Ohio  River,  including  Missouri  and 
Iowa  west  of  the  Mississippi. 

Although  Congress  did  not  yield  to  the  wishes  of  the  Conven- 
tion, Chicago  profited  by  the  advertisement  given  it,  and  some 
necessary  work  upon  the  river  was  done  at  the  cost  of  the  City, 
before  the  national  government  was  ready  to  assume  the  burden 
which  properly  belonged  to  it. 

Horace  Greeley,  of  the  New  York  Tribune,  and  Thurlow  Weed, 
of  the  Albany  Evening  Journal,  were  both  at  the  convention,  and 
Mr.  Weed,  who  came  by  lake  from  Buffalo,  in  a  letter  to  his  news- 
paper, written  the  day  before  the  opening  session,  made  the  pre- 
diction that  "upon  the  shores  of  these  lakes  is  an  extent  of  country 
capable  of  supporting,  and  destined  to  receive,  in  the  course  of  half 
a  century,  at  least  a  quarter  of  a  million  inhabitants."  Chicago  alone 
had  about  six  times  this  number  in  1897,  when  Mr.  Weed's  "half 
century"  came  to  an  end. 

Partial  failure  of  the  potato  crop  in  Ireland  in  1845,  and  com- 
plete failure  in  the  following  year,  caused  the  worst  famine  and 
pestilence  known  to  modern  European  history  to  ravage  the 
unhappy  Emerald  Isle  during  the  next  few  years.  (Ireland's  Story, 
Johnston  &  Spencer,  p.  310).  Out  of  a  population  of  less  than  nine 
millions,  more  than  a  million  persons  died  of  starvation  and  the 
plague,  during  the  years  1847  to  1851,  inclusive,  and  an  equal  number 
emigrated  to  America,  assisted  in  many  instances  by  relatives  who 
had  preceded  them. 

The  Irish  famine  and  bad  harvests  in  England  made  the  task 
of  the  Anti-Corn  Law  League  an  easy  one ;  and  the  removal  of  the 
British  tariff  on  grain  was  as  great  a  benefit  to  the  western  farmers, 
and  therefore  to  the  people  of  Chicago,  as  it  was  to  the  hungry  poor 
of  Great  Britain.  Bread  was  cheapened  in  London  and  Dublin,  and 
the  farmers  of  America  got  more  for  their  wheat,  the  amount  of  the 
duty,  which  was  removed,  being  divided  between  producer  and  con- 
sumer, as  is  usual  in  such  cases. 

The  little  city  responded  nobly  in  1847  to  appeals  for  the 
suffering  poor  of  Ireland  and  Scotland,  contributing  supplies  of 
flour,  pork,  and  corn,  as  well  as  money. 

The  Great  Migration. 

Next  to  the  war  of  1914  the  most  momentous  event  in  modem 
history  is  the  great  migration  of  people  from  every  nation  under 
the  sun  to  the  cities  and  farms  of  the  United  States  of  America. 
No  movement  of  population  ever  occurred  before  approaching  in 
magnitude  that  one  which,  for  the  past  fifty  years,  has  been  directed 
toward  our  country ;  nor  is  its  like  probable  in  the  future.  Not  one 
of  the  conquering  hosts  of  Goths,  or  Vandals,  or  Huns,  who,  in  the 
fourth  and  fifth  centuries  of  the  Christian  era  successively  invaded 


OF  THE  CITY  OF  CHICAGO  131 

and  finally  destroyed  the  Roman  Empire,  equaled  in  numbers  the 
men  and  women  who  have  landed  on  our  shores  in  a  single  year; 
and  all  of  them  combined  are  outnumbered  many  times  by  the  Irish, 
Germans,  Scandinavians,  Italians,  Russians,  Hebrews,  and  people 
of  other  races  and  nationalities,  who  since  the  Irish  Famine  in  1846-7 
and  the  close  of  the  Civil  War  have  descended  upon,  and  appro- 
priated the  agricultural  paradise  that  lies  between  the  Allegheny 
mountains  and  the  Rockies,  and  between  the  Canadian  border  and 
the  Mexican  gulf. 

No  movement  of  population  comparable  with  this  one  was 
possible  prior  to  the  era  of  the  railroad  and  the  steamship.  It  is 
within  bounds,  therefore,  to  say  that  only  within  the  last  sixty 
years  could  The  Great  Migration  have  taken  place;  and  that  within 
that  period  this  phenomenal  movement  of  humanity  has  exceeded 
about  ten  times  in  volume  the  greatest  previous  transfer  of  popula- 
tion in  the  world's  history,  and  that  the  distance  traveled  by  these 
modern  homeseekers  exceeded  about  ten  times  the  four  or  five 
hundred  miles  which  separated  the  old  homes  of  the  tribes  who 
overran  the  Roman  Empire  from  their  new  possessions  in  Greece, 
Italy,  Gaul,  and  Spain. 

Alaric  and  Genseric,  and  Attila,  and  the  hordes  they  led  from 
the  plains  of  Scythia  and  Hungary  and  northern  Asia,  won,  with 
their  spears  and  bows,  a  new  home  in  a  genial  clime ;  but  the  few 
thousand  square  miles  in  Greece  and  Italy,  in  France  and  Spain, 
which  came  into  possession  of  the  conquerors,  was  a  bauble  com- 
pared with  the  priceless  jewel  which  was  freely  offered  to  the  immi- 
grants of  the  nineteenth  century.  Rome,  even  in  her  decadence, 
fought  with  more  or  less  courage,  though  without  success,  in  defense 
of  her  patrimony ;  at  least  she  showed  her  appreciation  of  the  legacy 
which  had  been  bequeathed  to  her.  But  America,  with  an  inheri- 
tance incomparably  richer,  won  by  the  blood  of  countless  heroes, 
despised  this  unexampled  gift  of  Providence,  and  like  a  spoiled 
child,  seemed  anxious  only  to  abandon  her  priceless  heritage  to 
aliens  of  every  race  and  name. 

This  garden  of  the  world,  bequeathed  to  us  by  our  Revolu- 
tionary sires,  and  consecrated  and  confirmed  to  their  descendants 
by  the  dead  of  the  Civil  War,  is  today  largely  in  possession  of  those 
to  whom  Lexington  and  Yorktown,  Fort  Donelson  and  Appomattox 
are  words  without  meaning. 

Or,  can  it  be,  that  we  have  failed  to  see  that  it  was  the  purpose 
of  the  Supreme  Ruler  not  to  give  this  fair  land  in  fee  simple  to  the 
earlier  generation  of  Americans  who  sacrificed  so  much  for  it,  but 
only  to  allow  them  the  honor  of  holding  it  in  trust  for  the  dis- 
inherited of  all  nations.  Anyhow,  the  phenomenal  growth  of  the 
great  valley  of  the  United  States  during  the  past  half  century  could 
not  have  occurred  if  the  25,000,000  aliens  who  have  made  this 
country  their  home  since  the  close  of  the  Civil  War,  had  sought 


132  HISTORY  OF  THE  BOARD  OF  TRADE 

homes  elsewhere ;  and  without  this  development  of  the  farms,  the 
mines,  the  forests,  the  water-power,  and  the  manufactures  of  Michi- 
gan, Indiana,  Illinois,  Missouri,  Iowa,  Minnesota,  North  Dakota, 
South  Dakota,  Nebraska,  Montana,  Wyoming,  Colorado,  Kansas, 
Oklahoma,  and  Texas,  Chicago  would  bear  little  resemblance  to  the 
wonder  city  it  is  today.  Its  unparalleled  growth  is  but  the  reflection 
of  the  equally  marvelous  development  of  the  Inland  Empire  tribu- 
tary to  it. 

The  years  during  which  Chicago  began  its  wonderful  career 
were  unique  in  the  history  of  mankind.  The  application  of  steam 
power  to  the  production  of  commodities  was  changing  the  nature 
of  manufacturing  industry  as  radically  as  the  steamship  and  loco- 
motive were  changing  the  distribution  of  products  and  the  transfer 
of  human  beings  from  one  part  of  the  globe  to  another.  Although 
an  American  ship,  the  "Savannah,"  propelled  by  steam  and  sails, 
crossed  the  Atlantic  ocean  in  1819,  the  first  regular  steamers  began 
their  trips  between  the  British  Isles  and  American  ports  in  1838, 
a  year  after  the  great  panic,  at  a  time  when  steam  navigation  on 
the  western  rivers  had  reached  immense  proportions  and  fourteen 
years  before  Chicago  had  railroad  connection  with  the  East  and 
ten  years  before  the  first  rails  were  laid  into  the  city  of  Chicago. 

The  great  wave  of  immigration  which  between  1830  and  1848 
added  not  far  from  two  and  a  half  millions  to  the  population  of  the 
five  States  composing  the  old  Northwest  Territory,  was  made  up 
almost  wholly  of  men  and  women  of  American  birth  and  ancestry. 
The  sterile  hillsides  of  New  England,  the  worn  out  tobacco  lands 
of  Virginia,  the  cotton  plantations  of  the  Carolinas,  and  the  more 
fertile  valleys  of  the  Middle  States  each  contributed  its  quota  to 
this  army  of  homeseekers.  The  lure  of  cheap  and  productive  lands 
was  almost  irresistible,  and  to  this  was  added  the  great  unrest 
caused  by  a  dim  perception  of  the  titanic  new  forces,  the  measure 
of  whose  influence  could  not  be  foreseen. 

The  future  of  Chicago,  as  the  emporium  of  a  vast  garden,  was 
not  overrated  even  by  the  wild  speculators  of  1835  and  1836.  They 
failed  only  to  note  that  time  was  necessary  for  development  in  the 
new  age  of  steam  as  well  as  in  the  old  days.  Even  the  telegraph, 
first  successfully  used  in  1844,  and  slowly  developed  for  some  years 
thereafter,  while  abridging  time  and  space,  was  found  to  have 
limitations. 

Competent  authorities  have  estimated  that  the  arrivals  of 
immigrants  in  the  United  States  from  the  close  of  the  Revolutionary 
War  in  1783  to  the  year  1790  did  not  exceed  4,000  annually,  and  that 
for  the  succeeding  twenty  years  the  number  did  not  exceed  6,000  per 
annum,  and  that  the  total  number  of  immigrants  prior  to  September 
30,  1819,  was  about  250,000.  In  no  year  prior  to  1825  were  there  as 
many  as  10,000;  but  in  1828  the  number  exceeded  20,000;  in  1832 
it  exceeded  50,000 ;  and  in  1842,  for  the  first  time,  it  exceeded  100,000. 


OF  THE  CITY  OF  CHICAGO  133 

Improved  facilities  for  crossing  the  Atlantic  ocean  afforded  by  new 
steamship  lines  about  this  time,  the  famine  in  Ireland,  and  the  failure 
of  numerous  revolutionary  movements  on  the  continent  of  Europe, 
now  stimulated  the  desire  to  emigrate,  and  in  1847,  the  arrivals 
of  aliens  for  the  first  time  exceeded  200,000.  Further  analysis  of 
the  Reports  of  the  Immigration  Commission  shows  that  the  total 
number  of  immigrants  from  the  close  of  the  Revolution  to  the  1st 
of  January,  1848,  was  about  1,894,925  (2,344,220  to  September  30, 
1849),  and  that  more  of  them  came  in  the  next  eight  years  than 
had  come  in  the  preceding  sixty-four  years,  the  arrivals  exceeding 
400,000  for  the  first  time  in  1854.  This  was  the  advance  guard  of 
the  mighty  army  of  about  thirty-two  millions  of  immigrants  which 
has  taken  possession  of  the  United  States  of  America  since  the  State 
of  Illinois  was  admitted  to  the  Union.  Few  of  them,  however, 
except  some  Germans,  had  found  their  way  to  Chicago  prior  to  the 
receipt  of  the  first  telegraphic  message  from  Milwaukee,  on  the 
15th  of  January,  1848.  The  "Garden  City"  was  still  an  American 
town,  and  Illinois,  with  a  population  of  851,470  in  1850,  and  Wiscon- 
sin with  305,391  in  1850  were  still  American  commonwealths. 

Chronological  Table— 1843-1848 

The  Chicago  branch  of  the  State  bank  finally  closed  in 1843 

The  Chicago  Hide  &  Leather  Company  was  organized  in 1843 

The  Chicago  Daily  Journal  issued  its  first  number  April  22.  . .  .1844 
Gem  of  the  Prairie  (afterwards  merged  with  the  Tribune,  first 

issued  May  20)   1844 

First  permanent  public  school  building  erected 1845 

First  newspaper  printed  in  a  foreign  language,  Chicago  Volks- 

freund  issued  November  26 1845 

First  chair  manufactory  established 1845 

First  levy  of  special  taxes  for  street  improvements 1846 

War  with  Mexico  declared,  May  11 1846 

Chicago  made  a  port  of  entry,  July  16 1846 

River  and  Harbor  Convention  held  in  Chicago,  July  5 1847 

First  stove  foundry  (the  Phoenix)  established  in 1846 

County  hospital  opened  March  30 1847 

Rice's  first  theater  opened  June  28 1847 

Chicago  Tribune  first  issued  July  10 1847 

Weekly    steamboat    line    to    Sault    Ste.    Marie    established    in 

August    1847 

The  first  oats  were  shipped  by  lake  in 1847 

The  first  insane  asylum  was  built  in 1847 

The  first  law  school  was  opened  in 1847 

McCormick's  Reaper  factory  was  opened  in 1847 

The  first  municipal  building  and  market,  erected  in  January. . .  1848 
The  first  telegram  received  in  Chicago  (from  Milwaukee),  Janu- 
ary 15   1848 


134  HISTORY  OF  THE  BOARD  OF  TRADE 

Contract  let  for  building  first  32  miles  of  Galena  and  Chicago 
Union  Railroad  (the  first  7  miles  was  let  in  fall  in  1847), 

March    1848 

The  Board  of  Trade  was  formed  March  13 1848 

The  first  boat  (General  Fry)  passed  through  the  Illinois  and 

Michigan  Canal,  April  10 1848 

The  canal  was  formally  opened  April  16 1848 

The  Illinois  Staats  Zeitung  was  first  issued  in  April 1848 

The  South  Western  Plank  Road  (the  first  plank  road  in  Illi- 
nois) was  commenced  in  May 1848 

The  first  ocean-going  steamship  (Propeller  "Ireland")  arrived 

in  Chicago  from  Montreal  June  27 1848 

First  United  States  Court  opened  in  July 1848 

First    issue    of    Northwestern    Journal    of    Homeopathy    in 

October    1848 

Congress  made  appropriation  for  Chicago  Marine  Hospital  in.  .1848 
First  locomotive   ("The   Pioneer")    arrived  by  sailing  vessel, 

October  10 1848 

First  wheat  received  in  Chicago  by  rail  November  20 1848 

First    car    and    locomotive    works    (afterward    Scoville    Iron 

Works)  established  in 1848 

First  telegraph  office  opened  in 1848 

First  stock  yards   (near  Ashland  avenue  and  West  Madison 

street)  opened  in 1848 


CHAPTER  IV 

Beginning  of  the  Board  —  The  Voluntary  Association  —  The  Legal 

Organization 

1848 

THE  year  1848  was  full  of  historic  events  vital  to  the  v^rell-being 
of  Chicago  and  intimately  connected  with  its  commercial 
life.  The  year  was  only  fifteen  days  old  when  the  first  telegraphic 
message  was  received  in  Chicago.  It  came  from  Milwaukee  to 
Col.  J.  J.  Speed's  telegraph  office  in  the  Saloon  Building,  corner  of 
Lake  and  Clark  streets. 

Telegraphic  communication  with  the  east  was  not  established 
until  April  6th,  when,  the  "Journal"  says:  "The  first  flash  came 
through  from  Detroit  this  morning  at  9  A.  M.  By  the  dispatches 
it  will  be  seen  we  have  dates  from  New  York  of  yesterday  at  2 :30 
o'clock." 

On  the  first  of  March,  1848,  as  previously  stated,  the  Galena 
and  Chicago  Union  Railroad  Company  let  a  contract  for  grading 
and  bridging  twenty-five  miles  of  their  line,  which,  added  to  the 
seven  miles  already  under  contract,  extended  the  grading  of  the 
road  to  Fox  River.  By  the  21st  of  November,  1848,  ten  miles  of 
railroad  were  finished,  and  freight  traffic  inaugurated  as  far  as  the 
Desplaines  River.  On  the  previous  day  an  excursion  train  from 
Chicago  had  returned  to  the  city  carrying  a  wagon  load  of  wheat, 
bought  from  a  farmer  at  the  end  of  the  railroad  by  Mr.  C.  Walker, 
which  was  the  first  grain  ever  transported  to  Chicago  by  rail.  Mr. 
J.  Beecher  bought  some  hides  from  the  same  farmer,  and  they  also 
were  brought  in  by  the  excursion  train. 

Still  more  important  in  a  commercial  sense  was  the  comple- 
tion, in  April,  1848,  of  the  Illinois  and  Michigan  Canal,  and  the 
inauguration  of  traffic  on  this  great  artery  of  trade.  "The  main 
canal  from  Bridgeport  to  La  Salle,  not  including  the  four  miles  of 
river  from  Bridgeport  to  Chicago  harbor,  was  ninety-six  miles  in 
length,  sixty  feet  wide  at  the  surface,  thirty-six  feet  at  the  bottom, 
and  six  feet  deep.  At  this  time,  in  fair  weather,  the  waters  of  the 
lake  were  about  eight  feet  below  the  summit  of  the  canal."  (An- 
dreas, vol.  1,  p.  171-2.) 

The  first  canal  boat  to  arrive  in  Chicago  from  Lockport  was 
the  "General  Fry,"  towed  by  the  propeller  "A.  Rossiter."  It  reached 
Chicago  April  10th,  1848,  and  was  received  with  cheers  by  the  citi- 
zens. The  canal  was  formally  opened  on  the  16th,  and  the  event 
was  celebrated  with  great  enthusiasm  by  the  people  of  Chicago.    A 

135 


136  HISTORY  OF  THE  BOARD  OF  TRADE  [1848] 

few  days  later,  the  canal  boat  "General  Thornton"  arrived  from  La 
Salle  with  a  load  of  sugar  from  New  Orleans,  en  route  to  Buffalo. 
This  initial  shipment  from  New  Orleans  arrived  in  Buffalo  two 
weeks  ahead  of  consignments  sent  to  the  same  destination  via  ocean 
steamship  to  New  York,  and  thence  by  Hudson  river  and  Erie 
Canal  to  Buffalo. 

The  opening  of  cheap  transportation  to  and  from  the  interior 
of  Illinois  was  a  great  event  in  the  history  of  Chicago,  and  marks 
the  year  1848  as  the  beginning  of  a  new  era.  The  other  great  event 
of  the  year  was  the  organization  of  the  Board  of  Trade.  The  story 
of  its  "beginning"  has  been  so  well  told  by  Elias  Colbert,  that  no 
excuse  is  made  for  quoting  from  his  valuable  "Historical  and  Sta- 
tistical Sketch  of  the  Garden  City."    He  says : 

"Early  in  the  year  1848,  a  time  anterior  to  the  introduction  of 
the  iron-horse,  which  now  snorts  over  the  broad  and  fertile  prairies 
of  Illinois — long  before  elevators  of  one  million  bushels  capacity 
were  even  thought  of — a  time  when  the  clearance  of  a  lumber 
schooner  from  this  port  received  a  'local'  notice— when  elevators 
used  horses  as  a  motive  power,  Thomas  Richmond  and  W.  L.  Whit- 
/  ing  discussed  one  afternoon  the  propriety  of  establishing  a  Board 
of  Trade  in  Chicago.  Mr.  Richmond  was  then  in  the  elevating  busi- 
ness, and  Mr.  Whiting  a  grain  broker — the  first  who  pursued  this 
avocation  in  Chicago.  These  gentlemen  consulted  with  other  busi- 
ness men,  and  the  result  of  this  consultation  was  an  invitation  (pub- 
lished at  the  time)  for  the  merchants  generally  to  meet  together  on 
the  13th  of  March,  1848,  to  take  the  initiatory  steps  in  regard  to 
the  formation  of  the  Chicago  Board  of  Trade.  The  following  is 
a  copy  of  the  call : 

"Merchants  and  business  men  who  are  favorable  to  the  estab- 
lishment of  a  Board  of  Trade  in  this  city,  are  requested  to  meet  at 
the  office  of  W.  L.  Whiting,  on  the  13th  (March,  1848)  at  three 
o'clock  P.  M. 

Wadsworth,  Dyer  &  Chapin,  John  H.  Kinzie, 

George  Steele,  Norton,  Walter  &  Co., 

I.  H.  Burch  &  Co.,  DeWolf  &  Co., 

Gurnee,  Hayden  &  Co.,  Charles  Walker, 

H.  H.  Magie  &  Co.,  Thomas  Richmond, 

Neef  &  Church,  Thomas  Hale, 
Raymond,  Gibbs  &  Co. 

"At  this  meeting  nothing  further  was  done  than  to  pass  resolu- 
tions stating  that  the  growing  trade  of  Chicago  demanded  the  estab- 
lishment of  a  Board  of  Trade.  A  constitution  was  then  adopted 
and  a  committee  appointed  to  draw  up  by-laws,  to  be  submitted 
to  an  adjourned  meeting  to  be  held  on  the  first  Monday  in  April 
following,  when  they  were  adopted.  All  interested  were  invited 
to  meet  daily  at  the  rooms  of  the  Board  over  Gage  &  Haines'  flour 


[1848]  OF  THE  CITY  OF  CHICAGO  137 

Store,  on  South  Water  street,  which  had  been  rented  at  $110  per 
annum.  George  Smith  was  elected  President,  but  declining  to  serve, 
Thomas  Dyer  was,  at  a  later  meeting,  chosen  in  his  stead.  Charles 
Walker  and  John  P.  Chapin  were  chosen  first  and  second  vice-presi- 
dents, and  G.  S.  Hubbard,  E.  S.  Wadsworth,  George  Steele,  Thomas 
Richmond,  John  Rogers,  H.  G.  Loomis,  George  F.  Foster,  R.  C. 
Bristol,  J.  H.  Dunham,  Thomas  Dyer,  G.  A.  Gibbs,  John  H.  Kin- 
zie,  C.  Beers,  W.  S.  Gurnee,  J.  H.  Reed,  E.  K.  Rogers,  I.  H.  Burch, 

A.  H.  Burley,  John  Y.  Reed,  W.  B.  Ogden,  O.  Lunt,  Thomas  Hale, 
E.  H.  Hadduck,  I.  V.  Germain  and  L.  P.  Hilliard  were  appointed 
directors."     (Colbert,  p.  48.) 

At  the  meeting  on  the  first  Monday  of  April,  the  Board  was 
organized  with  82  members  whose  names  deserve  to  be  remembered. 
They  were:  Gurdon  S.  Hubbard,  E.  •  S.  Wadsworth,  Matthew 
Laflin,  George  Smith,  Orrington  Lunt,  Ira  V.  Germain,  J.  B.  F. 
Russell,  Theron  Pardee,  Thomas  Dyer,  D.  Humphrey,  H.  J.  Win- 
slow,  George  F.  Foster,  John  King,  Jr.,  James  H.  Rochester,  Isaac 
Hardy,  Zenas  Cobb,  Jr.,  R.  C.  Bristoll,  J.  H.  Dunham,  A.  V.  G. 
DeWolf,  Almond  Walker,  H.  H.  Harrison,  William  F.  DeWolf, 
James  Winn,  J.  H.  Reed,  James  H.  Carpenter,  J.  P.  Hotchkiss, 
John  High,  Jr.,  S.  L.  Brown,  J.  R.  Case,  Joseph  T.  Ryerson,  Andrew 
Blaikie,  I.  Whitcomb,  George  A.  Gibbs,  G.  M.  Higginson,  Jared 
Gage,  Sylvester  Marsh,  E.  H.  Hadduck,  John  P.  Chapin,  George 
Steele,  J.  H.  Kinzie,  John  Rogers,  Thomas  Richmond,  Thomas 
Hale,  James  Peck,  George  C.  Drew,  T.  V.  G.  Loomis,  B.  W.  Ray- 
mond, John  W.  Shoemaker,  Albert  Neeley,  Joseph  R.  Beals,  Amos 
G.  Throop,  John  L.  Marsh,  E.  K.  Rogers,  C.  Beers,  L.  P.  Hilliard, 
John  C.  Dodge,  John  Pearson,  Thomas  Thompson,  W.  S.  Gurnee, 
Alexander  "Brand,  Charles  Walker,  Allen-'Richmond,  M.  C.  Stearns, 
O.  Sherman,  G.  A.  Roblb,  H.  R.  Payson,  A.  H.  Burley,  I.  H.  Burch, 
W.  H.  Clarke,  J.  C.  Walter,  J.  A.  Smith,  T.  S.  Morgan,  W.  L.  Whit- 
ing, John  S.  Reed,  Thomas  B.  Carter,  T.  L.  Parker,  F.  A.  Stock- 
bridge,  Julian  S.  Rumsey,  C.  L.  Harmon,  John  C.  Haines,  WjlHam 

B.  Ogden  and  Jabez  B.  Foster.  (Andreas,  vol.  1,  p.  582.) 

"Tke^"Journar'  announced  the  arrival  of  the  Chicago  Board  of 
Trade  as  follows : 

"Board  of  Trade.  The  merchants  of  the  city  have  formed  a 
Board  of  Trade,  and  have  opened  an  office  on  Water  street  for  the 
purpose  of  the  transaction  of  business  on  'change.  Tho's  Dyer  has 
been  elected  President,  and  a  board  of  twenty-five  directors  are  to 
pass  upon  all  questions  of  difference  between  its  members,  in  re- 
gard to  commercial  transactions.  The  hour  for  meeting  each  day 
is  from  10  to  11  A.  M.  Members  and  strangers  introduced  by  them, 
are  alone  admitted.  The  Members  of  the  Press  are  voted  Honorary 
Members  of  the  Board.  We  look  upon  the  establishment  of  the 
Board  as  one  of  practical  utility,  and  one  which  will  prove  advan- 
tageous to  all  concerned.    As  such  we  shall  hope  to  see  it  prosper. 


138  HISTORY  OF  THE  BOARD  OF  TRADE  [1848] 

and  trust  that  those  for  whose  interest  it  has  been  formed,  will  not 
lose  all  interest  in  regard  to  its  continuance." 

The  same  day  the  "Journal"  in  its  Trade  and  Commerce  column 
announced  the  following:  The  market  is  a  trifle  more  active  today, 
but  produce  comes  forward  very  slowly.  75  to  78  cents  for  Spring, 
80  to  82  for  Winter  may  be  given  as  quotations  for  what  little 
wheat  there  is  arriving.  We  hear  of  a  sale  of  5,000  bushels  corn  to 
arrive  from  the  Illinois  River  in  May,  on  private  terms.  5,000  bush- 
els wheat  from  store  at  80  cents.  Freights  rule  low,  which  has  a 
tendency  to  keep  up  prices.  (Chicago  Daily  Journal,  April  21, 1848.) 
"  "At  the  first  meeting  of  the  Board,  Gurdon  S.  Hubbard,  Syl- 

, tvester  Marsh  and  John  Rogers  were  appointed  Inspectors  of  Fish 
and  Provisions,  and  John  Rogers  and  James  L.  Hare,  Inspectors  of 
Flour.  This  was  the  first  move  ever  made  in  the  city  toward  secur- 
ing uniformity  in  grades,  or  guaranteeing  the  quality  of  any  of 
the  merchantable  products  sold.  As  these  officers  had  no  legal 
authority  to  enforce  an  inspection,  a  committee  of  the  Board  was 
chosen  to  wait  upon  the  City  Council  and  ask  the  passage  of  an 
ordinance  for  the  government  of  Inspectors,  whereby  their  offices 
might  be  recognized  under  the  Municipal  law."  (Andreas,  vol.  1, 
p.  582.) 

The  Board  of  Trade  as  thus  organized  was  a  voluntary  associa- 
tion of  the  business  men  of  Chicago,  numbering  among  its  members 
representatives  of  every  important  business  interest ;  and  it  promptly 
expressed,  without  undue  modesty,  the  views  of  the  organization 
upon  all  public  questions  afifecting  the  welfare  of  the  city  and  the 
region  tributary  to  it.  It  had,  however,  no  legal  status  as  a  corpo- 
ration, nor  was  there  any  general  statute  of  the  State  of  Illinois 
under  which  such  an  organization  as  the  Board  of  Trade  could  have 
been  effected.  But  the  high  standing  of  the  members  of  the  Board, 
and  their  representative  character,  gave  to  its  recommendations, 
resolutions  and  petitions  an  authority  which,  without  this  personal 
backing,  they  would  have  lacked. 

In  October,  1848,  the  first  semi-annual  meeting  of  the  Board 
of  Trade  was  held  The  disordered  condition  of  local  finances,  to 
which  reference  has  been  made,  occupied  the  attention  of  the  Board 
of  Trade  and  a  committee  was  appointed  to  submit  a  plan  for  the 
establishment  of  a  general  system  of  banking.  A  bill  was  sub- 
mitted, which,  after  some  discussion,  and  amendments,  was  adopted, 
and  the  committee  authorized  to  take  measures  necessary  for  its 
passage  through  the  legislature,  and  at  the  same  time  to  procure  a 
charter  for  the  Board.     (Colbert,  p.  48.) 

In  the  list  of  able  men  composing  the  Board  of  Trade,  then  and 
afterwards  leaders  in  their  respective  lines  of  business,  were:  Wil- 
liam B.  Ogden,  President  of  the  Galena  and  Chicago  Union  Rail- 
road Company,  and  later  of  the  Chicago  and  Northwestern  Rail- 
road, and   the  first   Mayor  of  Chicago;    George   Smith    ("Scotch 


£1848]  OF  THE  CITY  OF  CHICAGO  139 

George"),  President  of  the  Wisconsin  Marine  and  Fire  Insurance 
Company,  who  stood  sponsor  for  a  large  part  of  the  currency  with 
which  the  commerce  of  Chicago  was  carried  on  ;  George  Steele,  pork 
packer  and  elevator  proprietor;  W.  S.  Gurnee,  afterwards  President 
of  the  Chicago  and  Milwaukee  Railroad  Company;  Gurdon  S.  Hub- 
bard, pork  packer,  warehouseman,  and  "oldest  inhabitant"  of  the 
city;  B.  W.  Raymond,  third  Mayor  of  the  city,  first  President  of  the 
Elgin  Watch  Company ;  J.  H.  Dunham,  merchant,  first  President 
of  the  Merchants  Loan  and  Trust  Company,  and  Geo.  W.  Dole,  pio- 
neer merchant. 

The  merchants  of  the  city  were  prompt  to  avail  themselves  of 
the  facilities  for  extending  their  trade  afforded  by  the  new  waterway, 
and  on  the  1st  of  July,  less  than  three  months  after  the  canal  was 
opened,  there  were  seventy  boats  registered  and  running  on  the 
canal  between  Chicago  and  La  Salle.  Before  six  months  had  passed 
the  number  incre'ased  to  138.     (Journal,  September  29,  1848.) 

A  daily  line  of  packet  boats  for  passenger  travel  between  these 
termini,  was  established  soon  after  the  canal  opened,  and  the  travel- 
ing public  were  informed  by  the  newspapers  that  these  boats  "are 
furnished  in  the  most  comfortable  style  possible."  Twenty-eight 
passengers  who  traveled  on  one  of  these  packets  from  Chicago  to 
Peru,  published  a  card  in  the  "Journal"  of  August  15th,  1848,  recom- 
mending it  "as  a  fast,  safe  and  commodious  packet  boat." 

As  the  Board  of  Trade  in  its  early  years  included  representatives 
of  all  depratments  of  commercial  life,  it  is  proper  to  note  that  on 
the  morning  of  August  16th,  1848,  there  were  in  the  port  of  Chicago 
two  barges,  twenty-seven  brigs,  sixty-seven  schooners,  six  steam- 
boats, six  propellers,  and  thirty-two  canal  boats,  crowding  the  main 
river  so  that  it  was  almost  impossible  for  any  one  of  them  to  shift 
its  position. 

All  records  of  the  activities  of  the  Board  of  Trade  during  its 
early  years  were  destroyed  by  the  Great  Fire  of  1871,  and  as  the 
newspapers  at  first  manifested  little  interest  in  the  organization, 
and  no  annual  reports  were  published  until  the  report  of  the  year 
1858,  available  material  for  a  complete  history  of  the  first  ten  years 
is  not  so  abundant  as  might  be  desired. 

In  the  summer  of  1848  the  "Journal"  published  a  short  review 
of  the  grain  market,  weekly,  unless  more  important  matter  crowded 
it  out,  and  from  the  first  of  September  until  the  closS  of  navigation, 
a  daily  review  usually  made  its  appearance. 

For  a  number  of  years  prior  to  the  completion  of  the  canal, 
wheat  had  been  the  chief  article  of  export  from  Chicago,  and  it  must 
have  been  a  disappointment  to  the  grain  dealers  of  the  Board  of 
Trade  that  the  opening  of  the  canal  caused  so  little  increase  in  the 
movement  of  wheat  to  this  port,  and  that  most  of  it  continued  to  ar- 
rive in  farmers'  wagons  as  it  had  done  ever  since  northern  Illinois 
farmers  began  to  raise  a  surplus. 


140  HISTORY  OF  THE  BOARD  OF  TRADE  [1848] 

On  the  other  hand,  receipts  of  corn,  which  hitherto  had  barely 
sufficed  for  local  consumption,  showed  an  immediate  and  striking 
increase,  as  shown  in  the  tables  below. 

Whether  the  apparent  anomaly  of  a  great  increase  in  receipts  of 
corn  as  a  result  of  the  completion  of  the  canal,  and  practically  no 
increase  in  the  movement  of  wheat,  was  due  to  the  fact  that  the 
latter  was  grown  too  far  from  the  canal  to  make  the  use  of  that 
waterway  practicable,  or  to  the  fact,  that  on  account  of  its  higher 
value  it  could  stand  the  greater  cost  of  transportation  by  farmers' 
wagons,  it  furnished  a  good  illustration  of  the  stubbornness  and 
caprice  with  which  the  lines  of  trade  and  the  course  of  market 
prices,  laugh  to  scorn  those  theorists  who  ignore  the  controlling  in- 
fluence of  factors  which  are  to  them  invisible.  Another  illustration 
of  this  apparent  caprice  in  trade  routes  was  a  falling  ofif  in  receipts 
of  hogs  in  1848  as  compared  with  the  previous  year.  Theoretically 
there  should  have  been  a  good  increase  as  a  result  of  the  completion 
of  the  canal,  and  this  was  the  general  expectation.  But  the  theory 
did  not  work  out,  and  for  a  curious  reason.  The  opening  of  the 
canal  enabled  towns  on  the  Illinois  River  to  get  cheap  salt  for  pack- 
ing purposes,  and  almost  every  river  town  in  the  West  engaged  in 
the  packing  business,  thereby  curtailing  the  supply  of  hogs  that 
Chicago  had  good  reason  to  expect. 

Although  not  strictly  germane  to  Board  of  Trade  history,  it 
is  worth  remembering  because  of  its  bearing  on  the  price  of  other 
foods,  that  in  the  summer  of  1848,  prairie  chickens,  three-quarters 
grown,  were  selling  in  Chicago  at  seventy-five  cents  a  dozen ; 
and  on  the  prairies  adjacent  to  the  city  a  good  hunter  could  bag  fifty 
to  eighty  in  a  day.     (Journal,  July  19,  1848.) 

No  very  reliable  statistics  of  receipts  of  corn  are  available  prior 
to  1852,  but  the  shipments  reported  for  1848  are  about  eight  times 
as  large  as  in  1847,  and  for  the  first  time  this  grain  constitutes  an 
appreciable  part  of  the  commerce  of  the  city. 

The  trade  in  oats  developed  more  slowly,  and  1851  was  the  first 
year  in  which  more  than  200,000  bushels  of  oats  were  shipped  from 
Chicago,  the  shipments  of  that  year  being  605,727  bushels  against 
158,084  in  the  previous  year. 

In  the  distribution  of  such  heavy  articles  as  lumber  and  salt  the 
Illinois  and  Michigan  Canal  achieved  an  instant  success.  Examina- 
tion of  the  tables  will  show  the  immense  expansion  of  the  lumber 
trade  during  the  years  immediately  following  the  opening  of  the  canal. 

Sugar  is  another  commodity  in  which  a  large  trade  developed, 
and  the  Journal  of  December  19th,  1848  (quoting  from  the  official 
records  of  the  canal),  reported  the  amount  of  sugar  cleared  from 
La  Salle  during  the  season  as  2,968,974  pounds. 

The  same  authority  gives  the  amount  of  salt  cleared  from 
Chicago  during  the  year,  for  points  on  the  canal,  as  32,099  barrels, 
and  the  amount  of  general  merchandise  as  4,665,139  pounds. 


[1848]  OF  THE  CITY  OF  CHICAGO  141 

The  most  reliable  figures  obtainable  of  the  movement  of  produce 
in  the  years  immediately  following  the  organization  of  the  Board 
of  Trade  are  found  in  Elias  Colbert's  Historical  and  Statistical  His- 
tory of  Chicago,  published  in  1868,  and  for  their  reproduction  in 
this  volume  no  apology  is  needed.    They  are  in  part  as  follows : 

"The  following  were  the  shipments  of  flour  by  lake  in  the  years 
1848  to  1851 ;  the  shipments  by  wagon  were  very  small ;  there  were 
no  railroads  to  carry  produce  east. 

Year  Barrels 

1848 45,200 

1849 51,309 

1850 100,871 

1851 72,406 


"Receipts  and  shipments  of  flour  in  barrels,  and  the  quantity 
manufactured  in  the  city  mills  for  the  years  1852  to  1857,  inclusive, 
were: 

Year  Received  Shipped       Manufactured 

1852 124,316  61,196  70,978 

1853 131,130  70,884  82,883 

1854 234,575  111,627  66,590 

1855 320,312  163,419  79,650 

1856 410,989  265,389  86,068 

1857 489,934  250,648  96,000 

"The  following  were  the  shipments  of  wheat  by  lake  from  1848 
to  1851,  inclusive: 

Year  Bushels 

1848  2,160,800 

1849  1,936,264 

1850   883,644 

1851    437,660 

"Receipts  and  shipments  of  wheat  in  bushels  from  1852  to  1857, 
inclusive,  were  as  follows  : 

Year  Receipts  Shipments 

1852 937,496  635,496 

1853 1,687,465  1,206,163 

1854 3,038,955  2,306,925 

1855 7,535,097  6,298,155 

1856 8,767,760  8,364,420 

1857 10,554,761  9,846,052 


142  HISTORY  OF  THE  BOARD  OF  TRADE  [1848] 

"Receipts  and  shipments  of  corn  from  1848  to  1857,  inclusive, 
were  as  follows : 

Year                                    Receipts  Shipments 

1848 Not  reported  550,460 

1849 Not  reported  644,848 

1850 Not  reported  1,262,013 

1851 Not  reported  3,221,317 

1852 2,991,011  2,757,011 

1853 2,869,339  2,729,552 

1854 7,490,753  6,626,054 

1855 8,532,377  7,517,625 

1856 11,888,398  11,129,668 

1857 7,490,000  6,814,615 

"Receipts  and  shipments  of  oats,  in  bushels,  from  1848  to  1857, 
inclusive,  were  as  follows : 

Year                                    Receipts  Shipments 

1848 Not  reported  65,280 

1849 Not  reported  26,849 

1850 Not  reported  158,084 

1851 Not  reported  605,727 

1852 2,089,941  2,030,317 

1853 1,875,770  1,633,842 

1854 4,194,385  3,229,987 

1855 2,947,188  1,889,538 

1856 2,919,987  1,014,637 

1857 1,707,245  506,778 

"Receipts  and  shipments  of  rye,  in  bushels,  from  1852  to  1857, 
inclusive,  were  as  follows : 

Year                                    Receipts  Shipments 

1852 Not  reported  17,315 

1853 86,162  82,162 

1854 85,191  41,153 

1855 68,166  19,318 

1856 47,707  591 

1857 87,711  

"Receipts  and  shipments  of  barley,  in  bushels,  so  far  as  known, 
from  1849  to  1857,  inclusive,  were  as  follows : 

Year                                    Receipts  Shipments 

1849 Not  reported  31,453 

1850 Not  reported  22,872 

1851 127,028  19,997 

1852 Not  reported  70,818 


[1848]  OF  THfi  CITY  OF  CHICAGO  143 

Year 

1853 

1854 

1855 

1856 

1857 


Receipts 

Shipments 

192,378 

120,267 

201,764 

148,411 

201,875 

98,011 

128,457 

19,051 

127,689 

17,993 

"Receipts  and  shipments  of  grass  seeds,  in  pounds,  so  far  as 
known,  from  1855  to  1857,  inclusive,  were  as  follows : 

Year  Receipts  Shipments 

1855 3,024,238  2,484,031 

1856 2,843,202  2,828,759 

1857 2,466,973  1,537,948 

"The  following  were  the  receipts  of  lumber  from  1848  to  1857, 
inclusive : 

Year  Numberof  Square  Feet 

1848  60,009,250 

1849  73,259,553 

1850  100,364,779 

1851  125,056,437 

1852  147,816,232 

1853  202,101,098 

1854  228,336,783 

1855  306,553,467 

1856  441,961,900 

1857  459,639,000 

"The  following  were  the  shipments  of  lumber  by  canal  from 
1848  to  1857,  inclusive: 

Year                      No.  of  Sq.  Ft.  Year                      No.  of  Sq.  Ft. 

1848 14,425,357  1853 58,500,438 

1849 26,882,000  1854 68,272.199 

1850 38,687,528  1855 82,641,925 

1851 56,845,027  1856 81,181,006 

1852 52,510,051  1857 82,427,643 

"The  following  table  gives  the  receipts  and  shipments  of  hogs 
with  the  number  packed  in  a  series  of  years: 

Year  Received        Shipped         Packed 

1851-2 

1852-3 65,158 

1853-4 73,980 

1854-5 138,515 

1855-6 308,539 

1856-7 220,702 

1857-8 214,223 


22,036 

48,156 

52,849 

54,156 

73,694 

170,881 

80,380 

103,074 

74,000 

88,546 

99,262 

144  HISTORY  OF  THE  BOARD  OF  TRADE  [1848] 

The  statistics  of  the  provision  trade  prior  to  1851  are  said  by- 
Andreas  (Vol.  1,  p.  559)  to  have  been  not  sufficiently  full  or  re- 
liable to  admit  of  tabulation.  So  large  a  part  of  the  receipts  of  cattle 
were  driven  in  on  foot  that  no  attempt  was  made  to  enumerate  them. 

The  first  regular  stock  yards  was  established  in  1848  on  West 
Madison  street  near  the  corner  of  Ashland  avenue,  and  was  known 
as  "Bull's  Head."  The  trade  soon  outgrew  the  accommodations  at 
this  place,  and  in  1856  John  B.  Sherman  laid  out  about  thirty  acres 
of  the  Myrick  property  on  the  lake  shore  north  of  31st  street,  which 
he  had  leased  and  which  had  been  used  already  as  a  stock  yard. 
Accommodations  were  provided  for  5,000  cattle  and  30,000  hogs. 
"Sherman's  Yards,"  situated  on  the  line  of  the  Illinois  Central  and 
Michigan  Central  railroads,  and  accessible  over  the  Illinois  Central 
Crossing  to  all  other  railroads  running  into  the  city,  soon  took  all 
the  trade  away  from  Bull's  Head. 

Prior  to  1848  all  the  grain  arriving  in  Chicago  had  been  stored 
either  in  ordinary  warehouses  in  bags,  or  in  bulk,  in  such  small  ele- 
vators, as  Newberry  and  Dole's,  Peck's,  Wheeler's,  Walker's  or 
others  where  it  was  elevated  by  man  power,  or  horse  power.  The 
first  elevator  in  which  steam  power  was  used  was  built  of  brick  and 
completed  in  September,  1848,  by  Capt.  R.  C.  Bristol,  and  had  a 
capacity  of  80,000  bushels. 

In  June,  1848,  the  British  steamship  "Ireland"  made  its  appear- 
ance in  the  Chicago  River,  and  the  "Chicago  Democrat"  of  June  27th 
says,  "Chicago  is  at  length  in  direct  communication  with  the  Atlantic 
Ocean  *  *  *  goods  can  now  be  shipped  from  Chicago  to  Liver- 
pool without  transshipment." 

Plank  Roads 

The  canal  completed  and  in  successful  operation,  and  the  Galena 
and  Chicago  Union  Railroad  under  contract  as  far  as  the  Fox  River, 
the  enterprising  men  of  the  city  began  a  system  of  plank  roads  to 
keep  communication  open  between  Chicago  and  the  interior  at  all 
seasons  of  the  year.  Indeed,  there  were  many  who  believed  that 
money  invested  in  plank  roads  would  bring  greater  benefit  to  the 
city  than  the  same  amount  used  in  the  building  of  railroads,  and  this 
was  true  so  far  as  immediate  results  were  concerned.  It  is  said 
that  70,000  teams  came  into  the  city  in  1847,  an  average  of  nearly 
200  a  day,  including  Sundays.  When  it  is  considered  that  during 
a  considerable  portion  of  the  year  the  roads  between  Chicago  and 
the  high  grounds  upon  which  Oak  Park  and  La  Grange  now  stand 
were  almost  impassable,  the  gathering  of  farmers'  wagons  in  the 
streets  of  Chicago  when  the  roads  were  good  and  farm  work  was 
not  pressing,  must  have  been  an  impressive  spectacle. 

The  first  plank  road  in  the  State  of  Illinois  upon  which  work  v^^as 
commenced  was  the  Southwestern  Plank  Road.  It  was  begun  in 
May,  1848,  completed  from  Chicago  to  Lyons  on  the  Desplaines 


[1848]  OF  THE  CITY  OF  CHICAGO  145 

River  in  March,  1849,  and  to  Brush  Hill  (16  miles),  or  near  it,  the 
following  winter.  Later  it  was  extended  under  the  name  of  the 
Naperville  and  Oswego  Plank  Road.  The  Northwestern  Plank 
Road,  organized  a  little  later  than  the  Southwestern,  was  finished  to 
Desplaines  in  1849,  and  to  Wheeling  in  1850. 

A  meeting  of  the  Board  of  Trade  was  held  on  the  16th  of  De- 
cember, 1848,  to  hear  the  report  of  a  committee  appointed  at  the 
semi-annual  meeting  to  prepare  a  plan  for  a  general  banking  law. 
The  attendance  does  not  appear  to  have  been  general,  and  the  meet- 
ing was  adjourned  to  the  19th,  and  the  secretary  in  his  advertise- 
ment of  the  adjourned  meeting  called  attention  to  the  following 
by-law  (Section  11),  which  he  says  is  as  follows: 

"Members  failing  to  attend  the  stated  or  special  meetings  of 
the  board,  shall  forfeit  and  pay  for  the  use  of  the  board,  fifty  cents  for 
each  absence  unless  excused  by  the  board." 

At  this  adjourned  meeting  the  Board  of  Trade  approved  the 
proposed  General  Banking  Law  recommended  by  the  committee. 
The  legislature,  however,  failed  to  enact  the  desired  measure  and  the 
angry  discussion  continued. 

It  seems  almost  incredible  now  that  the  proposed  banking  law 
advocated  by  the  Board  of  Trade  should  have  met  such  violent  and 
unscrupulous  opposition.  Unfortunately,  opposition  to  banks  had 
become  the  shibboleth  of  one  of  the  political  parties,  and  farmers 
as  a  class  lent  a  willing  ear  to  the  misrepresentations  so  indus- 
triously circulated  by  certain  newspapers.  The  State  of  Illinois 
(and  several  others)  had  passed  through  a  disgraceful  experience 
as  a  result  of  the  State  banks.  But  all  its  troubles  were  due  to  un- 
sound methods,  and  did  not  in  any  way  reflect  discredit  upon  banks, 
as  such.  The  following  gem  from  the  "Chicago  Democrat"  of  Feb- 
ruary 19th,  1849,  illustrates  the  perversion  of  intellect  which  is  pos- 
sible when  political  prejudice  is  allowed  to  usurp  the  place  of  reason. 
The  editor  says,  "the  people  who  are  interested  in  getting  up  this 
bank  are  produce  speculators.  Their  object  is  to  obtain  the  farmers' 
produce  on  trust,  charging  him  from  12  to  15  per  cent  for  the  credit 
he  has  extended  to  them.  Besides  this  12  to  15  per  cent  which  they 
will  make,  they  expect  to  realize  also  a  handsome  profit  on  the  prod- 
uce in  the  way  of  legitimate  trade.  And  as  they  own  and  control 
vessels  on  the  lakes,  and  command  freight,  they  have  every  means 
of  regulating  the  markets  to  suit  themselves.  Besides  having  the 
control  of  the  money  market  in  Chicago,  they  can  raise  or  depress 
the  prices  of  all  articles  of  farmers'  produce  at  their  will  and  pleasure. 
Thus,  by  giving  bankers  the  power  of  making  the  money  which  is 
to  pass  current  in  the  community,  you  *  *  *  jn  fact  give  them 
far  greater  privileges  and  powers  than  the  most  arbitrary  monarch 
of  the  earth  possesses.  They  can  at  will,  by  the  stroke  of  a  pen, 
say  how  much  the  farmer  shall  get  for  his  produce ;  how  much  the 
mechanic  shall  get  for  his  wages,"  etc.,  etc. 


146  HISTORY  OF  THE  BOARD  OF  TRADE  [1848] 

A  large  crop  of  wheat  was  raised  in  the  State  of  Illinois  in  1848, 
and  the  price  which  had  been  eighty  cents  to  one  dollar  per  bushel 
for  winter  wheat  in  the  early  part  of  the  year,  and  about  ten  cents  less 
for  spring  wheat,  declined  under  the  good  crop  prospect  until,  in 
the  early  part  of  August,  winter  wheat  was  quoted  as  low  as  sixty  to 
sixty-five  cents,  spring  wheat,  fifty-five  to  fifty-six  cents  per  bushel, 
and  as  usual,  everybody  predicted  still  lower  prices  in  the  autumn. 
The  "Beardstown  (Illinois)  Gazette"  said,  "It  is  now  certain  that 
unless  a  foreign  demand  is  created  by  some  unforeseen  cause,  the 
price  of  wheat  will  be  low  during  the  year."  ("Chicago  Journal," 
July  11,  1848.) 

Some  time  in  July  unfavorable  weather  set  in,  wheat  in  the 
northern  part  of  the  state  was  damaged  by  rust,  and  in  the  latter 
part  of  August  prices  advanced  until  winter  wheat  again  touched  one 
dollar  a  bushel  in  the  early  part  of  September.  This  extreme  price, 
however,  was  due  to  anxiety  on  the  part  of  shippers  to  complete 
cargoes,  the  capacity  of  vessels  in  the  Chicago  River  at  this  time 
awaiting  grain  being  stated  as  700,000  bushels. 

When  this  urgent  demand  was  satisfied  wheat  again  declined 
and  on  the  30th  of  December,  spring  wheat  was  quoted  at  fify-five 
to  fifty-eight  cents  per  bushel,  and  winter  wheat  sixty-two  to 
seventy-five  cents. 

Although  the  movement  of  corn  was  so  much  in  excess  of  any 
former  year,  and  prices  fluctuated  in  sympathy  with  wheat,  the 
range  during  most  of  the  year  was  between  twenty-five  and  forty 
cents  per  bushel,  closing  at  twenty-five  to  twenty-eight  cents  on 
the  last  business  day  of  the  year.  On  the  2nd  of  September  corn  was 
quoted  at  thirty-seven  to  thirty-eight  cents,  "at  which  price  con- 
tracts have  been  made  to  deliver  within  a  short  time,"  it  was 
announced. 

In  the  early  years  of  its  existence  the  Board  of  Trade  was  in 
no  sense  an  exchange.  There  was  no  public  market  where  buyers 
and  sellers  met,  and  where  buyers  competed  for  the  offerings.  Grain 
was  bought  from  farmers'  wagons,  or  from  farmers  or  grain  dealers 
in  the  country,  who  shipped  it  to  Chicago  by  canal  boat.  Even  in  the 
first  year  of  the  board's  existence  there  is  evidence  that  sales  were 
made  "to  arrive,"  or  in  other  words,  "for  future  delivery."  One  sale 
of  corn  to  arrive  in  the  following  month  has  been  quoted  from  the 
"Chicago  Daily  Journal"  of  April  21,  1848,  just  after  the  organiza- 
tion of  the  Board  of  Trade.  Several  sales  of  corn  "to  arrive"  were 
made  in  May,  and  in  the  following  September  it  is  said  that  "what 
(corn)  arrives  is  principally  on  contracts." 

It  is  a  tradition  on  the  Board  of  Trade  that  speculation  in 
"futures"  began  during  the  Civil  War  and  undoubtedly  it  was  not 
a  great  factor  in  the  grain  trade  prior  to  that  time.  But  every  mer- 
chant is  of  necessity  a  speculator  to  some  extent,  although  the  fre- 
quent fluctuations  in  the  grain  market  caused  by  favorable  or  unfa- 


[1848]  OF  THE  CITY  OF  CHICAGO  147 

vorable  seasons  make  the  speculation  more  apparent  in  these  prod- 
ucts of  the  soil  than  in  the  manufactured  goods  usually  carried  by 
drygoods  merchants.  Every  one  of  the  grain  dealers  in  the  early 
days  was  forced  to  become  a  speculator  whenever  he  bought  a 
wagon  load  of  grain  from  a  farmer,  or  sold  a  cargo  to  be  shipped  by 
lake.  As  there  were  no  transatlantic  cables,  information  as  to 
foreign  markets  reached  America  only  upon  the  arrival  of  steam- 
ships from  Great  Britain,  sometimes  many  days  apart.  Important 
events,  seriously  affecting  the  price  of  grain  in  foreign  markets  some- 
times occurred  in  the  interval  between  the  sailing  of  steamers  for 
America,  and  early  telegraphic  information  from  New  York,  or 
Boston,  of  the  steamer's  market  news,  occasionally  enabled  the  for- 
tunate or  enterprising  speculator  in  Chicago  to  reap  a  handsome 
profit.  One  instance  of  this  is  thus  described  in  the  "Democrat" 
of  September  12,  1848: 

"A  lucky  dog  who  happened  to  receive  a  slip  by  telegraph  last 
week,  and  who  had  long  been  watching  his  turn  of  the  wheel,  started 
for  the  docks,  like  a  fresh  hound  from  the  leash,  seeking  among  the 
holders  of  Illinois  wheat,  whom  he  might  make  a  meal  of.  He  soon 
came  across  his  man,  and  immediately  struck  a  bargain  for  a  cargo 
at  eighty  cents  per  bushel,  the  seller  chuckling  over  his  trade.  In 
less  than  fifteen  minutes,  however,  the  market  rose  to  eighty-five, 
and  the  fortunate  possessor  of  the  news  by  the  last  flash  pocketed 
the  cool  five  hundred." 

Because  there  was  no  system  of  inspection  in  the  early  years  of 
the  Board  of  Trade  and  no  standard  of  grades,  much  of  the  grain 
bought  by  Chicago  grain  merchants  was  shipped  to  Buffalo,  Oswego 
or  New  York,  for  sale  for  their  account,  although  there  were  fre- 
quent sales  reported  of  a  cargo  "free  on  board,"  at  prices  several 
cents  above  the  market  for  single  loads  from  farmers'  wagons.  The 
absence  of  a  public  speculative  market,  and  the  long  interval  between 
the  advices  by  steamer  from  European  markets,  compelled  grain 
merchants  to  do  business  on  wide  margins,  at  all  times,  and  espe- 
cially during  the  portion  of  the  year  when  navigation  was  closed. 
For  nearly  half  the  year,  from  December  to  May,  the  Chicago  grain 
buyer  had  no  possible  way  of  "hedging"  and  was  forced  to  carry  his 
purchases  until  spring  and  take  the  chances  of  the  market  several 
months  away.  Only  one  thing  was  certain,  interest,  insurance  and 
storage  would  add  several  cents  a  bushel  to  the  cost  of  his  grain 
before  he  would  have  an  opportunity  to  dispose  of  it. 

Transportation 

At  the  opening  of  navigation  in  1848,  eight  or  ten  cents  per 
bushel  on  wheat  from  Chicago  to  Buffalo  was  the  ruling  rate.  Other 
quotations  were : 

April  24th,  wheat  to  Buflfalo,  six  cents. 

April  25th,  wheat  to  Buiifalo,  five  cents. 


148  HISTORY  OF  THE  BOARD  OF  TRADE  [1848] 

May  4th,  wheat  to  Buffalo,  three  cents. 

June  10th,  wheat  to  Buffalo,  five  cents. 

The  first  report  from  Buffalo  for  the  season  of  1848,  on  the 
29th  of  April,  quotes  canal  freights  on  flour  seventy-five  cents  to 
New  York,  and  sixty-five  cents  to  Albany,  and  on  the  2nd  of  May 
eighteen  cents  on  wheat  to  Albany  and  fifteen  cents  on  corn  were 
the  rates.  On  the  17th  Buffalo  telegrams  quoted  fourteen  to  fifteen 
cents  on  wheat  to  Albany.  On  June  15  Buffalo  telegrams  quoted 
twelve  and  one-half  cents  on  wheat  to  Albany.  On  June  26  Buffalo 
telegrams  quoted  fourteen  and  one-half  cents  on  wheat  to  Albany. 

Neither  lake  freights  to  Buffalo  nor  canal  freights  eastward 
from  Buffalo  were  considered  of  sufficient  interest  to  be  regularly 
quoted  in  the  late  summer  of  1848.  A  few  rates  are  given  in  the 
daily  press,  from  which  it  appears  that  four  cents  per  bushel  was 
paid  on  wheat  from  Chicago  to  Buffalo  (August  28th).  six  cents  was 
paid  September  11th,  seven  and  one-half  cents  on  the  16th,  and  on 
the  23rd  nine  cents  was  paid  on  corn  to  Buffalo,  equivalent  to  ten 
cents  on  wheat ;  ten  to  twelve  cents  was  paid  on  the  29th  of  Septem- 
ber, nine  cents  on  the  30th  of  October,  and  six  cents  on  the  2nd  of 
November. 

On  the  19th  of  September  freights  on  the  Erie  Canal  were 
quoted  sixty-two  cents  per  barrel  on  flour  and  seventeen  cents  per 
bushel  on  wheat  to  Albany.  They  advanced  to  seventy  cents  on 
flour  and  nineteen  cents  on  wheat  on  the  9th  of  October,  and  were 
quoted  later  as  follows :  October  16th,  sixty-two  to  sixty-five  cents 
on  flour  to  Albany,  eighteen  cents  on  wheat  to  Albany. 

The  freight  on  a  barrel  of  flour  from  St.  Louis  to  New  York,  via 
Chicago,  in  the  summer  of  1848,  was  as  follows : 

On  the  Illinois  River $0.18 

On  the  Illinois  and  Michigan  Canal 25 

On  the  lakes,  Chicago  to  Buffalo 35 

On  the  Erie  Canal 60 

On  the  Hudson  River 10 

Total    $1.48  per  barrel 

The  time  from  St.  Louis  to  the  seaboard  was : 

Days 

From  St.  Louis  to  La  Salle 3j/^ 

On  the  canal  to  Chicago 2 

On  the  lakes  to  Buffalo,  say 6 

On  the  Erie  Canal  and  Hudson  River 9 


Total   20y2 


'2 


In   its   weekly   review   of  the   market  on   March  3,    1849,   the 
"Journal"  published  a  statement  of  wheat  and  flour  in  store  in  Chi- 


[1848]  OF  THE  CITY  OF  CHICAGO  149 

cago  on  the  1st  of  March,  which  is  interesting  chiefly  because  it 
shows  the  storage  facilities  then  existing  in  the  city.    It  is  as  follows : 

Bu.  Wheat  Bbls.  Flour 

E.  H.  Hadduck 114,500  4,900 

Raymond  Gibbs  &  Co 65,000  1,700 

J.  P.  Chapin  &  Co 55,500  700 

R.  C.  Bristol 50,000  200 

0.  Lunt 48,000 

Neely,  Lawrence  &  Co 40,500  2,500 

Dole,  Rumsey  &  Co 40,000  2,300 

C.&  A.  Walker 35,000  200 

Richmond  &  Co 26,000  200 

1.  V.  Germain 26,000 

James  Peck  &  Co 23,000 

DeWolf  &  Bro 21,000  50 

J.  D.  Ely  &  Co 20,000  200 

Richmond  &  King 18,500  300 

J.  H.  Rochester 16,500 

H.  Norton  &  Co 13,000  4,100 

J.  H.  Kinzie 5,000  450 

T.  Hale 1,000  200 

Total   618,500  18,000 

The  quantity  of  wheat  in  store  in  Chicago  on  the  1st  of  March 
for  each  of  the  previous  four  years  is  given  in  this  statement,  as 
follows : 

Bushels 

March  1,  1845 260,000 

March  1,  1846 682,133 

March  1,  1847 643,000 

March  1,  1848 330,000 

Prices  of  wheat  at  the  opening  of  navigation,  with  freights  to 
Buffalo,  are  given  as  follows : 

Price  of  Wheat  Freights  to  Buffalo 

1845 72c  6    @  7c 

1846 78c  15     @16c 

1847 75@78c  12i^@18c 

1848 65@68c  8    @  9c 

The  importance  of  Milwaukee  at  this  time  as  a  competitor  of 
Chicago  for  the  western  grain  trade  is  shown  by  a  statement  in  the 
"Journal"  of  April  7th,  that  the  amount  of  wheat  in  store  in  that 
city  was  440,000  bushels.  Southport  (Kenosha)  had  360,000  bushels, 
and  Racine  290,000  bushels  awaiting  the  opening  of  navigation. 


ISO  HISTORY  OF  THE  BOARD  OF  TRADE  [1849] 

1849 

A  flood  in  the  early  part  of  March,  1849,  swept  away  the  bridges 
and  caused  great  damage  to  shipping  in  the  river,  and  the  Board  of 
Trade  appointed  a  committee  to  draft  resolutions  upon  the  neces- 
sity of  facilitating  a  more  extended  intercourse  between  the  city 
and  the  surrounding  country. 

The  following  account  of  this  memorable  disaster  appeared 
in  the  "Journal"  of  March  12,  1849: 

"Seldom  have  we  witnessed  such  destruction  of  property  as 
that  caused  by  the  breaking  up  of  the  ice  in  the  river  this  morning. 
At  about  10  o'clock  the  mass  of  ice  in  the  south  branch  gave  way, 
carrying  away  with  it  the  bridges  at  Madison,  Randolph  and  Wells 
streets — in  fact,  sweeping  off  every  bridge  over  the  Chicago  river, 
and  also  many  of  the  wharves.  There  were  in  port  four  steamboats, 
six  propellers,  twenty-four  brigs,  fifty-eight  schooners,  two  sloops, 
and  fifty-seven  canal  boats,  many  of  which  have  been  either  totally 
destroyed  or  damaged  seriously.  The  moving  mass  of  ice,  canal 
boats,  propellers  and  vessels,  was  stopped  at  the  foot  of  Clark  street, 
but  withstood  the  pressure  but  a  moment — crashing  vessels  and 
falling  spars  soon  giving  note  of  the  ruin  that  was  to  follow.  A 
short  distance  below,  the  river  was  again  choked  opposite  Kinzie's 
warehouse.  Here  the  scene  was  most  indescribable.  Vessels,  pro- 
pellers and  steamers  were  thrown  together  in  the  utmost  confusion, 
forming  a  dam  across  the  river  which  backed  the  water  to  an  un- 
precedented height.  At  this  point,  at  11 :30  a.  m.,  they  still  remain, 
in  all  twenty-eight  vessels ;  two  propellers,  the  Ontario  and  General 
Taylor ;  two  steamboats,  the  Ward  and  Pacific.  The  C.  J.  Richmond, 
Whirlwind,  Diamond,  Benton,  etc.,  and  all  more  or  less  injured,  the 
propeller  Ontario  very  badly.  There  are  also  a  large  number  of 
canal  boats  sunk  at  this  point." 

A  long  list  of  the  vessels  involved  followed,  filling  something 
like  a  column  of  the  paper.  The  damage  was  conservatively  esti- 
mated at  $108,000,  a  large  sum  in  those  days  for  a  small  community, 
when  money  was  not  plentiful  and  credit  for  reconstruction  not 
readily  available.  The  loss  was  distributed  as  follows:  Damage  to 
the  city,  bridges,  etc.,  $15,000 ;  ten  vessels  damaged,  say  $5,000  each ; 
$50,000;  ten  vessels  damaged,  say  $800  each,  $8,000;  twenty  canal 
boats  lost,  at  $1,500  each,  $30,000;  damage  to  wharves,  non- 
enumerated  boats,  etc.,  $5,000.  The  damage  to  the  steamers  Ward 
and  Pacific  alone  was  estimated  by  Captain  Clement  at  from  $10,000 
to  $15,000.  Some  of  the  bridges  were  found  a  few  days  afterwards 
stranded  on  the  lake  shore  about  eight  miles  below  the  mouth  of 
the  river.  The  indomitable  spirit  of  the  community,  however,  faced 
the  situation  bravely  and  the  Board  of  Trade,  despite  the  fact  that 
many  of  its  members  were  among  the  heaviest  losers,  took  a  promi- 
nent and  generous  part  in  the  reconstruction  work  that  followed. 


[1849]  OF  THE  CITY  OF  CHICAGO  ISl 

The  tolls  per  mile,  on  each  1,000  pounds,  upon  the  Illinois  and 
Michigan  Canal  for  1849,  upon  certain  articles,  were  as  follows,  viz : 

Mills 

Wheat 5 

Corn 3 

Oats 3 

Pork 6 

Beef 6 

Domestic  animals 10 

Bacon    6 

Barley  5 

Cotton   in  bales 10 

Coal  1 

Flour 5 

Hides 10 

Hay  and  Fodder 5 

Lead,  pigs  and  bars 1 

Drygoods,  groceries,  hardware,  cutlery,  crockery,  etc. .  12 

Nails    8 

Paper 12 

Salt    4 

Sugar    10 

Whisky  and  highwines 10 


On  each  passenger  eight  years  old  and  upwards  4  mills  per  mile. 
Sixty  pounds  of  baggage  was  carried  free  for  each  passenger  paying 
full  fare. 

The  "Journal"  of  March  3,  1849,  quotes  from  the  "Cincinnati 
Advertiser"  the  following  estimate  of  hogs  packed  in  the  West  in 
the  two  previous  years : 

Season  Season 

1847-48  1848-49 

Valley  of  the  Missouri 43,000  55,000 

Valley  of  the  Mississippi 212,500  190,000 

Valley  of  the  Illinois,  including  Chicago 147,681  122,500 

Valley  of  the  Wabash  and  White  rivers 191,641  135,000 

Valley  of  the  Lower  Ohio 227,200  255,168 

Valley  of  the  Middle  Ohio,  including  Miami 

Valley    590,186  499,700 

Valley  of  the  Upper  Ohio,  including  Scioto 

Valley  and  Wheeling,  Va 85,000  120,009 

State  of  Tennessee  100,000  60,000 

Total    1,597,208       1,437,377 


152  HISTORY  OF  THE  BOARD  OF  TRADE  [1849] 

Lafayette,  Ind.,  was  a  large  packing  center  at  this  time,  but  the 
estimate  of  $1,858,935  as  the  value  of  its  packing  house  products  in 
the  previous  year,  which  the  "Journal"  of  February  10,  1849,  credits 
to  the  Wabash  "Atlas,"  seems  excessive. 

The  "Journal"  of  March  28,  1849,  copies  from  the  St.  Louis 
"New  Era"  an  article  which  sets  forth  the  alleged  advantages  to 
Chicago  shippers  of  the  St.  Louis  wheat  market  over  the  Buffalo 
market,  as  a  place  for  the  sale  of  the  large  stocks  then  on  hand  in 
Chicago,  "and  the  many  flourishing  towns  along  the  line  of  the 
Illinois  and  Michigan  Canal."  While  no  direct  comparison  is  drawn 
between  Chicago  and  St.  Louis,  it  is  obvious  that  if  the  latter  city 
was  a  better  market  than  Buffalo  for  Chicago  wheat  it  would  be  far 
better  for  the  shipper  on  the  line  of  the  canal  and  the  Illinois  river 
to  send  his  wheat  to  the  Missouri  city  direct  rather  than  ship  it  to 
Chicago  to  be  re-shipped  from  there  to  St.  Louis.  Probably  the  ob- 
ject of  the  writer  was  to  divert  some  of  the  canal  and  Illinois  river 
shipments  from  Chicago.  The  "Journal"  refutes  the  long  argument 
by  pointing  to  the  fact  that  "during  the  past  season  cargoes  of  wheat 
were  bought  in  St.  Louis  and  shipped  to  Buffalo  via  Chicago,"  suffi- 
cient proof  that  the  eastern  markets  were  best. 

Nevertheless,  in  the  spring  of  1850,  before  the  opening  of  lake 
navigation,  there  was  a  considerable  movement  of  wheat  and  flour 
from  Chicago  to  St.  Louis  via  the  canal  and  Illinois  River.  Even 
after  the  straits  of  Mackinaw  were  open  the  southern  demand  con- 
tinued, and  nearly  100,000  bushels  of  wheat  and  more  than  30,000 
barrels  of  flour,  some  of  which  came  from  Wisconsin  lake  ports, 
went  down  the  canal  to  St.  Louis  before  the  normal  eastward  move- 
ment of  wheat  and  flour  was  resumed.  Indeed,  considerable  Michi- 
gan wheat  passed  through  Chicago  en  route  to  St.  Louis  via  the 
canal,  and  a  small  quantity  from  Buffalo,  according  to  the  report 
of  the  canal  trustees.     ("Journal,"  January  25,  1851.) 

Much  was  done  during  the  year  1849  to  increase  the  facilities 
for  commerce  along  the  river  front.  A  dock  was  built  on  the  south 
side  of  the  river  at  the  foot  of  La  Salle  street ;  another  between 
La  Salle  and  Wells  streets ;  and  the  Galena  and  Chicago  Union  Rail- 
road built  a  dock  160  feet  long  on  the  west  side  of  the  North  Branch 
opposite  their  passenger  station.  The  river  was  widened  in  places 
where  great  inconvenience  had  been  caused  by  the  narrow  channel ; 
Mason  and  Morley  built  a  stone  flouring  mill  sixty  feet  square  and 
four  stories  high,  near  the  G.  &  C.  U.  R.  R.  station,  and  Ogden  & 
Jones,  a  large  brick  warehouse  on  the  South  Branch. 

The  first  annual  meeting  of  the  Board  of  Trade  was  held  on 
the  2nd  of  April,  1849,  and  the  following  officers  were  elected,  viz: 

President,  Thomas  Dyer  (re-elected). 

Vice-Presidents,  J.  P.  Chapin  and  Charles  Walker. 

Mr.  Whiting  declined  to  act  as  secretary,  and  John  C.  Dodge 
was  elected  in  his  stead. 


[1849]  OF  THE  CITY  OF  CHICAGO  153 

Recognizing  the  necessity  of  securing  telegraphic  reports  from 
eastern  markets,  a  committee  was  appointed  to  confer  with  officials 
of  the  telegraph  companies  for  this  purpose. 

All  members  of  the  board  were  requested  to  attend  the  daily 
meetings  on  'Change,  and  the  hour  for  meeting  was  fixed  at  9 
o'clock  a.  m. 

No  change  was  made  in  the  voluntary  character  of  the  board  at 
this  meeting,  but  it  was  resolved  that  copies  of  the  act  of  the  legis- 
lature, passed  February  8,  1849,  authorizing  the  incorporation  of 
Boards  of  Trade  and  Chambers  of  Commerce,  be  procured  for  the 
information  of  members  of  the  association. 

The  condition  of  the  streets  of  the  city  at  this  time  may  be  in- 
ferred from  the  numerous  newspaper  references  to  their  impassable 
character,  of  which  the  following  from  the  "Journal"  of  April  10, 
1849,  is  a  specimen : 

"Lake  and  Randolph  (streets)  are  staked  out  with  guide  boards 
and  finger  posts,  so  that  there  is  no  danger  of  disappearing  without 
full  warning  beforehand.  *  *  *  A  post  set  on  its  edge  has 
a  placard  upon  it  with  the  information,  'No  drug-store  below  this.' 
Another  post  is  surrounded  with  several  hats,  a  pair  of  boots,  feet 
uppermost,  an  umbrella  and  other  articles  appertaining  to  this  life, 
with  the  inscription : 

"As  I  am,  you  may  be. 
Taking  this  road,  you'll  follow  me,  etc." 

South  Water  street  had  begun  to  show  improvement  before 
this  time.  As  early  as  the  4th  of  September,  1848,  the  "Journal" 
said,  under  the  head  of  "Water  Street,"  "This  great  rendezvous 
for  the  wheat  buyers  and  sellers  is  rapidly  improving.  It  was  form- 
erly an  elongated  trench,  filled  to  a  depth  unsounded  with  a  com- 
pound of  most  doubtful  consistency,  and  lined  on  both  sides  with 
a  few  honorable  exceptions,  with  as  rickety  a  row  of  tumble-down 
tenements  as  ever  groaned  under  a  northwester.  *  *  *  But  a 
great  change  has  been  wrought — the  street  is  actually  becoming 
fathomable.  Brick  blocks  of  stores  and  offices  have  taken  the  place 
of  many  monuments  of  human  endurance — new  storehouses  have 
been  built,  old  ones  enlarged  and  improved — and  it  will  ere  long 
be  rendered  worthy  of  the  great  wheat  market  of  the  great 
Northwest." 

Lake  street  was  not  improved  until  the  summer  of  1849,  a  para- 
graph in  the  "Journal"  on  June  20th  of  that  year  conveying  the  cheer- 
full  intelligence  that  "they  have  broken  ground  on  Lake  street,  pre- 
paratory to  making  a  bottom,  where  in  wet  weather  none  has  ever 
been  found." 

In  April,  1849,  the  Michigan  Central  Railroad  was  finished  to 
New  Buffalo,  and  on  the  23rd  cars  began  running  from  Detroit  to 
that  point,  where  close  connections  were  made  with  steamboats  for 


154  HISTORY  OF. THE  BOARD  OF  TRADE  [1849] 

Chicago.  Passengers  leaving  Detroit  at  7  a.  m.  arrived  in  Chicago 
at  midnight. 

On  the  16th  of  May  the  board  of  trustees  of  the  Illinois  and 
Michigan  Canal,  upon  representations  made  by  the  St.  Louis  Cham- 
ber of  Commerce,  and  endorsed  by  the  Board  of  Trade  of  Chicago, 
adopted  an  order  allowing  a  drawback  of  50  per  cent  in  the  canal 
tolls  upon  the  following  named  articles  "which  may  be  transported 
from  the  Mississippi  River  to  the  Hudson  River,  via  the  Illinois  and 
Michigan  Canal,  to  wit:  Beef,  pork,  bacon,  lard,  flour,  tallow,  wool. 
Tobacco,  hemp,  beeswax,  furs  and  peltries  (including  buffalo 
robes),"  and  also  upon  certain  specified  articles  when  shipped  from 
the  Hudson  River  to  the  Mississippi  River,  via  the  Illinois  and 
Michigan  Canal. 

The  Illinois  and  Michigan  Canal,  the  Wabash  and  Erie  Canal 
and  the  Ohio  State  canals  also  petitioned  the  New  York  Canal 
Board  to  make  corresponding  reductions  in  the  rates  of  toll  on  the 
Erie  Canal,  and  this  request  was  complied  with.  Upon  certain  speci- 
fied articles  originating  at  the  Mississippi  River  and  destined  to 
the  Hudson  River,  via  the  Illinois  and  Michigan  Canal,  a  drawback 
of  50  per  cent  of  the  Erie  Canal  rates  was  ordered  by  the  canal  board, 
and  on  certain  specified  articles  originating  at  the  Hudson  River 
and  destined  to  the  Mississippi  by  the  same  route,  a  drawback  was 
conceded  of  25  per  cent.  (Report  of  Wm.  H.  Swift,  president  of 
Illinois  and  Michigan  Canal  Board.    See  "Journal,"  March  12,  1850.) 

On  the  15th  of  June,  1849,  adhesive  stamps  for  the  prepayment 
of  postage  were  for  the  first  time  advertised  for  sale  in  Chicago. 

A  census  of  the  city  was  taken  during  the  summer  of  1849  by 
Hathaway  and  Taylor,  who  reported  the  population  22,850. 

In  the  summer  and  autumn  of  1849,  Mr.  Charles  Walker  built 
a  g^ain  storehouse  at  Babcock's  Grove,  twenty-one  miles  from  the 
city  on  the  Galena  and  Chicago  Union  Railroad.  Babcock's  Grove 
(Lombard)  was  then  the  western  terminus  of  the  road,  and  this 
warehouse  was  the  first  one  built  by  a  Chicago  grain  dealer  on  any 
western  railroad. 

The  following  item  from  the  "St.  Louis  Valley  Farmer,"  quoted 
in  the  Chicago  "Journal"  of  September  5,  1849,  shows  that  the 
Illinois  and  Michigan  Canal  had  become  the  popular  route  from 
St.  Louis  to  the  East.  "The  route  via  the  lakes  and  Illinois  River  is 
the  only  one  that  can  be  depended  upon  at  this  time  by  those  hav- 
ing shipments  to  make,  or  an  intention  to  travel  east.  Freight  has 
been  received  through  that  way  in  twelve  days,  while  on  the  Ohio 
River  route  thirty  of  forty  days  are  often  required  to  get  freight 
through.  From  all  accounts,  the  line  from  Chicago  to  Buffalo  is 
managed  in  a  superior  manner." 

A  serious  epidemic  of  cholera  afflicted  the  people  of  Chicago  in 
the  summer  of  1849,  and  the  alarm  was  so  great  that  business  with 
the  country  was  curtailed  during  the  six  or  eight  weeks  that  the 


11849]  OF  THE  CITY  OF  CHICAGO  ISS 

plague  prevailed.  The  greatest  number  of  deaths  in  a  single  day 
was  on  the  first  of  August,  when  thirty  persons  died  of  the  dread 
scourge. 

In  the  latter  part  of  August  a  committee  of  the  Board  of  Trade 
waited  upon  the  Common  Council  to  urge  the  necessity  of  imme- 
diately dredging  and  improving  the  harbor.  Charles  Walker,  chair- 
man of  the  committee,  recommended  that  bonds  of  the  city  to  an 
amount  not  exceeding  $1,000.00  be  issued,  payable  in  five  or  six 
years,  and  expressed  the  opinion  that  the  general  government 
would  refund  any  reasonable  outlay  which  might  be  made  for  the 
improvement  of  the  harbor. 

Acting  upon  this  suggestion  of  the  Board  of  Trade,  the  Com- 
mon Council  made  an  appropriation  of  $1,000.00  in  bonds  bearing 
ten  per  cent  interest,  and  payable  in  five  years.  These  bonds  were 
entrusted  to  the  officers  of  the  Board  and  a  committee  was  ap- 
pointed to  dispose  of  them  to  the  best  advantage,  and  to  oversee  the 
expenditure  of  the  funds  resulting  from  their  sale. 

South  Water  Street,  in  the  vicinity  of  the  Board  of  Trade,  and 
Market  Street,  were  the  places  to  which  farmers  drove  their  loads 
•of  wheat,  and  where  buyers  congregated  like  "bees  in  a  clover  field," 
as  one  poetically  inclined  reporter  describes  the  scene. 

The  Galena  and  Chicago  Union  Railroad,  although  in  opera- 
tion only  21  miles,  brought  into  the  city  during  the  week  ending 
September  8,  1849,  about  25,000  bushels  of  wheat  out  of  a  total  of 
80,000  received  from  all  sources. 

The  first  shipment  of  Lehigh  coal  via  the  lakes,  the  Illinois 
and  Michigan  Canal  and  the  Illinois  River,  reached  St.  Louis  in  the 
autumn  of  1849,  and  the  St.  Louis  "Republican's"  announcement  of 
its  arrival  is  quoted  in  the  Chicago  "Journal"  of  November  14. 

On  the  21st  of  November,  1849,  the  schooner  Diamond  cleared 
from  Chicago  for  Havana.  At  some  Illinois  River  point  she  was  to 
load  a  cargo  of  corn  for  New  Orleans,  and  then  proceed  to  her  desti- 
nation. Her  masts  were  stowed  away,  and  everything  made  snug 
for  her  trip  across  the  prairies  of  Illinois.  The  "Diamond"  was  of 
^'100  tons  burthen,"  and  her  trip  to  the  West  Indies  was  recognized 
as  an  experiment. 

In  the  autumn  of  1849  an  attempt  was  made  to  injure  the  credit 
of  the  Wisconsin  Marine  and  Fire  Insurance  Company,  whose  cer- 
tificates of  deposit,  issued  without  legal  authority,  but  with  the 
moral  backing  of  "Scotch  George"  Smith,  furnished  a  considerable 
part  of  the  currency  in  which  the  business  of  Chicago  and  the  sur- 
rounding country  was  transacted.  At  St.  Louis  the  excitement 
was  great,  and  the  holders  of  certificates  were  in  a  panic  until  they 
found  that  the  certificates  were  redeemed  as  fast  as  presented,  at  a 
trifling  discount,  barely  sufficient  to  pay  the  cost  of  exchange  be- 
tween St.  Louis,  and  Milwaukee,  the  place  of  issue  and  redemption. 

Although  the  following  figures  of  shipments,  published  in  the 


1S6  HISTORY  OF  THE  BOARD  OF  TRADE  [1849J 

"Journal"  of  December  7,  1849,  differ  slightly  from  those  in  Col- 
bert's History,  they  are  given  here  without  comment. 


1849  1848 


f    Wheat,  bushels 1,940,058  1,680,855 

;     Flour,  barrels    50,812  26,970' 

I     Corn,  bushels 666,432  330,741 

Beef  and  Pork,  barrels 68,799  59,200 

The  editor  adds,  "The  above  shows  a  gratifying  increase  in  the 
business  of  Chicago  during  the  season,  notwithstanding  the  adverse 
state  of  things  incident  to  the  appearance  of  the  cholera  in  our  city 
the  past  summer." 

"The  following  is  a  comparative  table  of  the  shipments  of  some 
of  the  leading  articles  (by  canal)  : 

1849  1848 

Lumber,  square  feet 25,773,000  14,419,747 

Merchandise,   pounds 8,322,677  4,665,139 

Salt,  barrels  56,388  32,099 

"Number  of  passengers  carried  in  1849,  31,100." 
A  few  days  later  (December  28)  a  statement  is  published  show- 
ing the  total  amount  of  canal  tolls  for  the  first  two  seasons.     It  is 
as  follows: 

1849  1848 

Chicago $  70,170.66  $52,077.46 

La  Salle   38,187.38  35,813.43 

Lockport 5,651.98  New  office 

Ottawa    4,839.27  New  office 

Total   $118,849.29  $87,890.89 

The  Galena  and  Chicago  Union  Railroad  was  completed  to  the 
Fox  River,  and  an  excursion  from  Chicago  to  St.  Charles  on  the 
15th  of  December  took  part  in  a  celebration  at  the  latter  town. 

Telegraphic  market  reports  from  St.  Louis,  New  York,  Buffalo 
and  other  American  points  appear  frequently,  but  not  daily,  in  the 
Chicago  papers  in  the  latter  part  of  1849 ;  but  news  from  the  English 
markets  comes  only  upon  arrival  of  the  steamers  at  Halifax,  and 
is  about  two  weeks  old  when  it  reaches  Chicago,  and  there  is  an 
interval  of  a  week  or  ten  days  between  steamers. 

The  early  part  of  the  growing  season  of  1849  was  cold  and  wet. 
Corn  rotted  in  the  ground  and  required  replanting  ("Journal,"  June 
2nd).  Coal  fires  were  comfortable  as  late  as  the  13th  of  June.  But 
about  the  middle  of  June  conditions  changed  completely.  The  out- 
look for  the  wheat  crop,  which  had  been  very  promising,  was  im- 
paired by  rust.  Much  of  the  crop  in  Ohio,  Indiana,  portions  of 
Illinois  and  Wisconsin,  was  destroyed,  while  Michigan  and  New 


11849]  OF  THE  CITY  OF  CHICAGO  157 

York  reported  good  yields.  The  European  wheat  crops  were  good 
and  the  demand  from  abroad  was  not  urgent. 

During  the  first  three  months  of  the  year,  weekly  reports  of 
the  market  were  published  in  the  "Journal"  with  considerable  regu- 
larity. Then  for  a  number  of  weeks  there  were  no  quotations,  the 
flood  in  the  Chicago  River,  a  serious  break  in  the  canal,  and  im- 
passable roads  causing  complete  stagnation  in  the  grain  trade  of  the 
city.  From  the  early  part  of  May  until  the  close  of  navigation  in 
December,  some  report  of  the  market  appeared  nearly  every  day, 
although  the  stereotyped  phrases  "no  sales  were  reported"  and 
"quotations  are  unchanged"  were  used  more  frequently  than 
any  others. 

In  default  of  standard  grades  for  comparison,  the  reports  of 
sales  give  at  best  an  imperfect  view  of  the  fluctuations  in  the  grain 
market.  In  a  general  way  it  is  evident  that  the  market  during  the 
first  half  of  the  year  showed  little  change  from  the  quotations  of 
January  6,  1849,  which  were  50@60c  for  spring  wheat  and  60@70c 
for  winter  wheat.  There  were  occasional  sales  below  and  above 
these  figures,  but  on  the  9th  of  July  spring  wheat  was  quoted  50@56c, 
and  winter  wheat  65@70c.  The  damage  caused  by  rust  brought 
about  an  advance,  especially  for  choice  samples  of  winter  which 
sold  as  high  as  9Sc  "to  arrive"  on  the  25th  of  August.  Spring  wheat 
sold  as  high  as  79c  a  few  days  later.  The  markets  then  declined  and 
the  closing  quotations  of  the  year  1849  are  :  Spring  wheat,  50(a)52c  ; 
winter  wheat,  60@70c. 

Lake  freights  were  high,  thirteen  cents  being  asked  on  wheat 
to  Buffalo  at  the  opening  of  navigation ;  but  this  rate  could  not  be 
maintained,  and  during  most  of  the  season  vessel  owners  accepted 
five  to  six  cents  on  wheat,  and  a  cent  less  on  corn,  to  Bufifalo.  As 
the  close  of  navigation  approached,  higher  rates  were  paid. 

The  market  for  coarse  grains  showed  independent  strength 
during  the  greater  part  of  the  year.  Corn  advanced  steadily  from 
23@2Sc  per  bushel  in  January  to  40c  in  July,  and  47(S)48c  in  August, 
after  which  it  declined,  and  the  last  quotation  of  the  year  was  28c 
per  bushel,  probably  for  new  corn. 

Oats  which  were  quoted  17@18c  per  bushel  in  the  early  part 
of  January,  advanced  to  25c  in  March,  and  this  was  the  price  of  oats 
of  average  quality  until  the  movement  of  the  new  crop  in  the  early 
autumn  caused  a  decline  to  22@23c,  which  were  the  closing  quo- 
tations of  the  year. 

Packers  paid  $2.25@3.50  for  the  hogs  they  slaughtered  in  Janu- 
ary and  February,  1849,  but  the  next  packing  season  opened  in 
November  at  a  lower  range  of  prices,  and  the  last  quotation  of  the 
year  is  $2.25@3.12^  per  hundred  pounds  on  the  28th  of  Decem- 
ber. In  addition  to  the  competition  of  Cincinnati,  Louisville,  St. 
Louis  and  Lafayette,  which  Chicago  packers  always  had  to  meet, 
small  towns  on  the  Illinois  and  Mississippi  Rivers  again  made  prep- 


158  HISTORY  OF  THE  BOARD  OF  TRADE  [18491 

arations  to  pack,  among  them  Peru,  Lacon,  Peoria,  Pekin,  Copperas 
Creek,  Beardstown,  Naples,  Quincy  and  Muscatine.  Madison  and 
Vincennes,  Indiana  and  Milwaukee  also  were  in  the  field. 

A  statement  of  the  business  of  the  Illinois  and  Michigan  Canal 
for  the  years  1848  and  1849  was  prepared  by  William  H.  Swift, 
president  of  the  canal  board,  and  published  in  the  daily  press.  The 
following  table  shows  (in  part)  the  increasing  trade  over  the 
waterway : 

1848  1849 

Pork,  barrels   3,428  9,098 

Salt,  barrels 32,656  58,853 

Sugar,  pounds '. 3,912,122  4,218,298 

Merchandise,  pounds 4,948,000  9,276,940 

Wheat,  bushels 454,111  579,598 

Corn,  bushels 516,230  754,288 

Coal,  tons 5,416  7,519 

Lumber,  square  feet  15,425,357  26,882,000 

The  amount  of  tolls  received  in  1849  was,  according  to  the 
copy  of  President  Swift's  report  as  published  in  the  "Journal" : 

At  Chicago $  96,757.56 

At  Lockport 5,638.35 

At  Ottawa 4,831.62 

At  La  Salle 38,145.19 

Total   $148,375.72 

(Chicago  "Journal,"  March  12,  1850.)  Evidently  the  printer 
has  transposed  the  first  two  figures  of  the  Chicago  tolls,  which 
should  be  69  instead  of  96,  and  the  total,  probably,  $118,375.72. 

The  rapid  development  of  the  Chicago-owned  lake  marine  is 
shown  in  the  report  of  the  Secretary  of  the  Treasury  on  Commerce 
and  Navigation  for  1849.  The  tonnage  registered  in  the  principal 
lake  districts  for  1849  and  the  two  previous  years,  was  as  follows : 

Districts  1847  1848  1849 

Buffalo,  tons 35,413.01  42,623.73  40,667.64 

Detroit,  tons   27,164.79  25,850.20  33,466.94 

Cuyahoga  (Cleveland),  tons..  25,493.72  30,403.31  30,047.11 

Chicago,  tons 3,951.56  10,488.62  17,382.43 

In  two  years  Chicago  tonnage  had  quadrupled,  while  Detroit 
had  increased  less  than  25  per  cent.  ("Journal,"  June  5,  1850.) 

The  Legal  Organization 

Early  in  the  winter  of  1849-50,  Senator  Stephen  A.  Douglas  of 
Illinois  introduced  in  the  Senate  of  the  United  States  a  bill  to  aid  the 
construction  of  the  Illinois  Central  Railroad  from  the  junction  of  the 


[1849]  OF  THE  CITY  OF  CHICAGO  159 

Ohio  and  Mississippi  Rivers  to  La  Salle,  with  a  branch  to  Chicago, 
and  a  branch  to  Galena,  and  granting  to  the  State  of  Illinois  for 
this  purpose  "every  alternate  section  of  land,  designated  by  even 
numbers  for  six  sections  in  width  on  each  side  of  said  road  and 
branches."  It  passed  the  Senate  May  2nd,  1850,  and  the  House  of 
Representatives  September  20th,  John  Wentworth  and  ex-Governor 
Bissell  being  entitled  to  great  credit  for  pushing  it  through  the 
lower  house  of  Congress. 

1850 

Early  in  the  year  1850  the  announcement  was  made  that  the 
Canadian  government  had  adopted. the  American  standard  of  2,000 
pounds  for  a  ton  weight,  and  had  substituted  the  American  decimal 
currency  for  the  English  pounds,  shillings  and  pence. 

On  the  22nd  of  January,  1850,  cars  began  running  on  the  Galena 
and  Chicago  Union  Railroad  from  Chicago  to  Elgin,  and  on  the  1st 
of  February  the  event  was  duly  celebrated  in  the  latter  city,  a  large 
delegation  from  Chicago  taking  part  in  the  exercises. 

An  important  step  in  the  extension  of  the  telegraph  lines  was 
thus  announced  in  the  advertising  columns  of  the  local  newspapers 
January  30,  1850.  "O'Reilly's  .Ohio,  Indiana  and  Illinois  Telegraph 
connecting  directly  Chicago,  Toledo  and  Cincinnati,  and  interme- 
diate points  via  the  Wabash  and  Miami  Valleys,  is  now  completed 
and  ready  for  business,  affording  the  commercial  men  and  others  of 
Chicago  new  and  increased  facilities  for  telegraphing.  Communica- 
tions for  the  East  and  South  to  any  point  in  the  United  States  and 
Canada  will  be  received  and  transmitted  and  every  exertion  made  to 
secure  promptness  and  render  satisfaction."  O'Reilly's  Eastern  Line 
was  transmitting  telegraphic  messages  from  Washington,  D.  C,  to 
Chicago  as  early  as  March  26,  J850,  and  shortly  thereafter  the  local 
daily  press  was  receiving  by  wire  a  brief  summary  of  the  proceed- 
ings of  Congress. 

Free  navigation  of  the  St.  Lawrence  River  had  long  been  desired 
by  the  people  of  the  northwest,  and  the  Board  of  Trade  took  the  lead 
in  advocating  this  measure.  Both  the  Senators  from  Illinois  urged 
action  by  Congress,  and  although  they  were  unsuccessful,  the  Board 
of  Trade  thanked  them  for  the  persevering  manner  in  which  they  had 
endeavored  to  further  this  great  project. 

The  formation  of  bars  in  the  Illinois  River  had  seriously  inter- 
fered with  the  business  of  the  Illinois  and  Michigan  Canal,  and 
the  Board  of  Trade  used  its  influence  to  secure  the  removal  of  these 
hindrances  to  navigation. 

At  the  Second  Annual  Meeting,  held  in  April,  1850,  the  board 
voted  to  organize  under  the  general  law  of  February  8,  1849,  as 
"The  Board  of  Trade  of  the  City  of  Chicago."  To  provide  for  the 
deficit  of  $146.20  shown  by  the  treasurer's  report,  it  was  voted  ta 
raise  the  annual  dues  from  two  dollars  to  three  dollars,  and  resolved 


160  HISTORY  OF  THE  BOARD  OF  TRADE  [1850] 

that  the  old  members  pay  three  dollars  each  into  the  treasury,  and 
that  the  office  furniture  be  transferred  to  the  new  organization.  It 
was  further  provided  that  all  members  should  sign  the  constitu- 
tion, and  that  new  members  should  pay  an  initiation  fee  of  five 
•dollars  each.  The  new  constitution  required  that  annual  and  semi- 
annual meetings  should  be  held,  and  that  special  meetings  might 
be  called  upon  the  written  request  of  five  members.  The  Board  of 
Trade  then  voted  to  dissolve,  and  on  the  13th  of  April,  1850,  the 
Board  of  Trade  of  the  City  of  Chicago  began  its  corporate  life 
under  the  laws  of  the  State  of  Illinois. 

On  the  20th  of  April,  1850,  the  members  of  the  Board  of  Trade 
met  at  their  rooms,  101  South  Water  street,  for  the  election  of 
•officers.  The  following  officers  were  chosen :  President,  Charles 
Walker;  Vice-President,  John  P.  Chapin ;  Treasurer,  Thomas  Hale; 
Secretary,  John  C.  Dodge ;  Directors :  Thomas  Richmond,  George 
Steele,  Amos  G.  Throop,  B.  W.  Raymond,  W.  S.  Gurnee,  G.  W. 
Shepard,  J.  L.  James,  L.  P.  Hilliard,  E.  K.  Rogers,  G.  S.  Hub- 
bard. 

A  steam  canal  boat,  built  on  the  Monongahela  River,  made  its 
appearance  in  Chicago  during  the  month  of  July  and  engaged  in 
traffic  on  the  canal.  The  "Chief  Engineer,"  as  she  was  named,  was 
100  feet  in  length  and  propelled  by  two  locomotive  engines.  She 
had  an  upper  cabin  large  enough  to  accommodate  thirty-five  passen- 
gers, and  her  speed  was  about  six  miles  an  hour.  ("Journal,"  July 
22,  1850). 

The  appropriation  made  by  Congress  at  its  last  session  for  im- 
provement of  the  harbor  at  Chicago  was  $15,000.00,  the  same  amount 
that  was  appropriated  for  Waukegan  and  Kenosha,  and  one-half 
as  much  as  Michigan  City  was  to  receive. 

Cholera  was  again  epidemic  in  Chicago  in  the  summer  of  1850, 
and  the  dullness  in  the  grain  trade  was  attributed  in  part  to  the  dis- 
inclination of  farmers  to  expose  themselves  to  the  contagion. 

The  greatest  activity  prevailed  at  this  time  throughout  the 
West  and  Southwest  in  the  construction  of  plank  roads.  From 
western  New  York  in  the  East,  to  Illinois,  Arkansas,  Louisiana  and 
Texas  in  the  West  and  Southwest,  the  needs  of  the  farmers  and  the 
satisfactory  returns  from  the  roads  already  built  stimulated  the 
construction  of  new  lines,  and  the  newspapers  of  the  day  are  full 
of  reference  to  them. 

"Plank  roads  are  rapidly  becoming  the  improvement  of  the 
day.  We  can  hardly  glance  over  a  paper  from  any  section  of  the 
country  without  seeing  notices  of  plank  roads  completed,  plank 
Toads  commenced,  or  plank  roads  projected."  ("Journal,"  February 
13,  1850). 

During  the  summer  of  1850  a  channel  250  feet  wide  was  dredged 
"by  the  U.  S.  government  through  the  bar  at  the  end  of  the  North 
Pier,  and  it  was  announced,  on  the  27th  of  August,  that  vessels 


£1850]  OF  THE  CITY  OF  CHICAGO  161 

drawing  ten  to  twelve  feet  of  water  could  use  this  channel  across 
the  bar. 

In  the  hope  of  inducing  the  members  to  meet  daily,  as  they  had 
been  repeatedly  urged  to  do,  the  hour  from  12  noon  to  1  p.  m.  was 
decided  upon  as  the  time  of  the  daily  meeting  at  the  board  rooms. 
But  the  early  enthusiasm  was  lost,  the  membership  declined,  and 
few  attended  the  meetings. 

The  great  event  of  the  year  1850  in  the  history  of  the  Board  of 
Trade  and  of  the  City  of  Chicago,  and  the  State  of  Illinois  as  well, 
was  the  passage  of  the  bill  which  granted  to  the  State  of  Illinois  more 
than  two  and  a  half  million  acres  of  land  in  the  heart  of  the  state  to 
aid  the  construction  of  the  Illinois  Central  Railroad,  already  referred 
to.  The  original  bill,  introduced  by  Judge  Breese,  U.  S.  Senator 
from  Illinois,  provided  only  for  a  line  from  Cairo  to  Galena ;  but,  as 
finally  amended  and  passed,  it  included  a  "branch"  to  Chicago, 
which  soon  became  of  more  importance  than  the  main  trunk  line 
through  the  center  of  the  state.  It  goes  without  saying  that  the 
Board  of  Trade  gave  a  vote  of  thanks  to  Senators  Douglas  and 
Shields  for  their  services  in  securing  this  valuable  land  grant. 

Discussion  began  at  once  as  to  the  best  method  of  building  the 
railroad,  some  advocating  its  construction  and  ownership  by  the 
State  of  Illinois,  and  others  favoring  the  incorporation  of  a  joint 
stock  company.  The  latter  alternative  was  adopted  ;  the  Act  passed 
in  1836  incorporating  the  Illinois  Central  Railroad  Company  was 
repealed,  and  a  new  company  was  chartered  by  the  legislature  of 
Illinois  under  the  name  of  the  Illinois  Central  Railroad  Company, 
February  10,  1851.  On  the  21st  of  May,  1852,  the  first  section  of 
about  thirteen  miles,  from  Chicago  to  Calumet,  was  completed  and 
the  first  train  from  Detroit,  on  the  Michigan  Central  Railroad, 
reached  the  city  over  this  track. 

Steele's  elevator  on  the  north  side  of  the  river,  at  the  corner  of 
Franklin  Street,  with  a  capacity  of  100,000  bushels,  was  built  during 
the  year,  and  made  an  important  addition  to  the  storage  facilities  of 
Chicago. 

A  remarkable  shortage  of  wheat  and  other  grains  as  well,  de- 
veloped in  the  Mississippi  Valley  in  the  spring  of  1850.  Prices  were 
higher  in  St.  Louis  and  other  river  towns  than  in  Chicago  and 
Cincinnati,  and  as  a  result,  St.  Louis  drew  supplies  from  both  these 
points  of  accumulation,  and  even  from  Wisconsin  lake  ports,  Michi- 
gan and  Buffalo,  as  previously  stated.  Many  Mississippi  River 
steamboats  were  laid  up  for  want  of  cargoes,  and  the  lake  trans- 
portation business  was  greatly  curtailed.  All  the  wheat  from  the 
canal  and  the  Illinois  River  which  in  ordinary  seasons  found  a  mar- 
ket in  Chicago,  was  turned  in  the  opposite  direction  by  the  unusual 
conditions,  for  which  the  poor  crop  in  the  Mississippi  Valley  in 
1849  and  the  increasing  immigration  to  the  West  were  chiefly  re- 
sponsible.   As  an  indication  of  the  growth  of  Iowa,  an  announcement 


162  HISTORY  OF  THE  BOARD  OF  TRADE  [1850] 

in  the  "Davenport  Gazette"  of  the  30th  of  May  that  a  canal  boat 
from  Chicago  loaded  with  reaping  machines  had  arrived  is  worthy 
of  note. 

The  exhaustion  of  the  wheat  supply  in  the  Mississippi  Valley 
was  so  complete  that  shipments  to  the  East  were  very  small,  and 
the  first  cargo  of  new  wheat  did  not  move  from  Chicago  in  that  direc- 
tion until  the  19th  of  September. 

In  the  latter  part  of  1850,  money  brokers  published  lists  of  bank 
notes  in  circulation  with  the  rate  of  discount  upon  each.  From  one 
of  these  lists  in  the  "Journal"  of  December  3rd,  it  is  learned  that  the 
notes  of  all  solvent  banks  in  the  New  England  States,  New  York, 
New  Jersey,  eastern  Pennsylvania,  Delaware,  Maryland,  District 
of  Columbia,  western  Virginia  and  Ohio,  certain  selected  banks  in 
Kentucky  and  Michigan,  the  State  Bank  of  Indiana,  the  Wisconsin 
Marine  and  Fire  Insurance  Company,  and  the  Chicago,  and  City, 
banks  were  quoted  at  one  per  cent  discount  for  gold  or  silver.  All 
other  bank  notes  vary  from  2  per  cent  to  75  per  cent  discount,  the 
notes  of  the  Bank  of  Illinois  at  Shawneetown  easily  holding  the  place 
of  dishonor  with  a  market  value  of  one-quarter  their  face. 

At  the  close  of  the  year  1850  the  Galena  and  Chicago  Union  Rail- 
road extending  to  Elgin  and  Aurora  with  a  total  mileage  of  less  than 
fifty  miles,  was  still  the  only  line  running  into  the  city.  Cincinnati 
at  the  same  time  had  about  six  hundred  miles  of  tributary  railroads 
completed,  and  nearly  as  much  more  under  construction. 

A  review  of  the  beef  packing  business  in  Chicago  in  1850  is 
found  in  the  "Gem  of  the  Prairie"  of  November  16,  1850,  and  is 
interesting  for  the  purpose  of  comparison.     It  is  in  part  as  follows : 

"The  slaughtering  and  rendering  establishment  of  Sylvester 
Marsh  is  situated  upon  the  beach  immediately  north  of  the  North 
Pier.  The  packing  house  to  which  the  carcasses,  ready  for  the  block, 
are  taken  is  situated  immediately  upon  the  bank  of  the  river,  at  the 
corner  of  North  Water  and  Wolcott  (North  State)  streets.  It  was 
built  during  the  present  year,  for  the  express  purpose  to  which  it  is 
now  devoted,  and  is  three  stories  high  with  two  feet  brick  walls, 
sixty  by  eighty-four  feet  upon  the  ground.  Mr.  Marsh  employs 
seventy-five  hands,  slaughters  185  cattle  per  day,  and  expects  to 
slaughter  4,500  during  the  season.  *  *  *  The  following  is  a 
statement  in  round  numbers  of  the  extent  of  Mr.  Marsh's  business: 
Cash  paid  for  cattle,  $90,000;  for  salt  and  barrels,  $15,000.00;  for 
labor,  $5,000.00;  total,  $110,000.00.  Mr.  Marsh  sells  his  beef  in 
Boston  and  New  Bedford. 

"The  slaughtering  and  packing  house  of  Gurdon  S.  Hubbard  is 
situated  upon  the  North  Branch,  between  Michigan  and  Illinois 
streets.  It  was  built  last  year,  and  possesses  capacity  for  an  ex- 
tensive business.  The  present  season  Mr.  Hubbard  estimates  the 
number  of  cattle  he  will  slaughter  for  himself  and  others  at  5,000. 
The  number  slaughtered  per  day  is  105 ;  and  seventy-five  hands  are 


[1850]  OF  THE  CITY  OF  CHICAGO  163 

usually  employed  in  the  different  departments  of  the  business.  Mr. 
Hubbard  finds  a  market  for  his  beef  in  New  York.  Estimated  extent 
of  the  business  of  the  house  the  present  year: 

Paid  for  Cattle $100,000.00 

Paid  for  salt,  barrels,  labor,  etc 21,000.00 

Total   $121,000.00 

"The  establishment  of  Wadsworth,  Dyer  &  Co.  is  situated  on 
the  South  Branch  in  the  suburbs  of  the  city.  The  various  buildings 
cover  more  than  half  an  acre.  The  number  of  cattle  slaughtered  by 
Wadsworth,  Dyer  &  Co.,  the  present  season,  will  probably 
exceed  6,000. 

"The  firm  employs  110  men.  Two  hundred  and  ten  head  of 
cattle  are  slaughtered  per  day.  They  sell  in  part  in  the  London  and 
Liverpool  markets,  where  their  brand  takes  precedence  over  beef 
from  every  other  quarter  of  the  world.  That  which  they  pack  for  the 
home  market  is  sold  in  New  York,  Boston  and  New  Bedford. 

"The  establishment  of  R.  M.  Hough  &  Co.  is  situated  upon  the 
South  Branch  a  short  distance  below  Bridgeport.  They  have  erected 
a  substantial  building  60x130  feet,  with  wings,  and  constructed  a 
dock  for  convenience  of  loading  their  beef  into  vessels.  They  work 
fifty  hands,  slaughter  130  head  of  cattle  per  day,  and  pack  both  for 
the  London  and  home  market.  An  estimate  of  the  business  of  R.  M. 
Hough  &  Co.  for  the  season  is : 

Cash,  paid  for  cattle $70,000.00 

Salt,  barrels,  labor,  etc 15,000.00 

Total   $85,000.00 

"On  the  river  near  the  tannery  of  Gurnee  Hayden  &  Co.  is  the 
slaughtering  and  packing  house  of  William  B.  Clapp.  Mr.  Clapp 
kills  100  head  of  cattle  per  day,  and  sells  his  product  in  New  York, 
Troy  and  Boston.    His  estimate  of  the  season's  business  is: 

Cash  paid  for  cattle $56,000.00 

Salt,  barrels,  labor,  etc 16,000.00 

Total    $72,000.00 

"A  little  further  down  is  the  establishment  of  Eri  Reynolds  who 
employs  thirty  hands,  slaughters  about  ninety  head  per  day,  and 
estimates  his  business  the  present  season  as  follows: 

Cash  paid  for  cattle $48,000.00 

Salt,  barrels,  labor,  etc 10,000.00 

Total   $58,000.00 


164  HISTORY  OF  THE  BOARD  OF  TRADE  [1850] 

"Clybourne  &  Ellis  are  located  on  the  North  Branch  about  a 
mile  above  Ogden's  Bridge.  They  expect  to  slaughter  about  2,000 
head  during  the  season,  and  estimate  that  their  expenditures  will 
amount  to  about  $45,000.00." 

Most  of  these  cattle,  amounting  in  all  to  about  27,500  head, 
were  fattened  in  Illinois,  McLean  County  leading  all  others.  Some, 
however,  were  from  Indiana  and  Iowa. 

As  might  be  expected  from  the  abnormal  conditions  which 
have  been  described,  wheat  fluctuated  violently  in  1850.  An  urgent 
demand  for  actual  consumption  in  the  interior  stimulated  specu- 
lation, and  when  the  advance  culminated  in  the  latter  part  of  May 
at  $1.20@1.25  per  bushel  for  winter  wheat  in  Chicago,  more  than 
50  per  cent  had  been  added  to  the  quotations  which  were  current 
in  the  preceding  January. 

The  fall  in  prices  in  the  next  three  months,  under  the  influence 
of  good  crop  prospects,  was  very  severe  and  caused  the  failure  of 
many  grain  firms  throughout  the  country,  among  them  the  great 
New  York  house  of  Suydam,  Sage  &  Co. 

Ohio  was  the  banner  state  in  1850,  and  claimed  to  have  raised 
twenty-five  million  bushels  ;  Michigan,  northern  Indiana  and  south- 
ern Illinois  had  fine  crops,  and  although  there  was  much  complaint 
of  "fly"  and  "chinch  bug"  in  parts  of  northern  Illinois,  and  some 
bad  reports  from  Iowa  and  Wisconsin,  the  general  result  of  the 
harvest  was  so  good  that  in  the  latter  part  of  August  winter  wheat 
had  declined  to  60@70  cents  a  bushel — little  more  than  one-half 
the  price  it  commanded  three  months  before.  Low  prices  prevailed 
during  the  remainder  of  the  season,  and  the  last  quotations  of  the 
year  were  55@60  cents  for  spring  wheat  and  65@70  cents  for 
winter  wheat. 

The  same  conditions  in  the  Mississippi  Valley  which  produced 
high  prices  for  wheat  in  Chicago  operated  to  sustain  the  price  of 
corn,  which  advanced  from  26@28  cents  per  bushel  at  the  begin- 
ning of  the  year  to  52  cents  in  the  early  part  of  June.  This  price 
was  reached  again  in  August,  but  the  promise  of  an  abundant  crop 
depressed  the  market,  and  on  the  18th  of  October  some  enthusiastic 
"bear"  sold  30,000  bushels  of  corn  for  delivery  in  June,  1851,  at 
28  cents  per  bushel,  the  first  recorded  sale  of  any  grain  for  delivery 
so  far  in  the  future.  At  the  close  of  the  year  the  market  is  quoted 
31@35  cents. 

Oats  advanced  in  sympathy  with  other  grains,  from  20@22 
cents  per  bushel  in  the  early  part  of  January  to  45@50  cents  in 
the  last  of  May,  declining  again  to  20  cents  in  September  and 
October,  and  again  advancing  to  26@29j/2  cents  at  the  close  of 
the  year. 

The  "Gem  of  the  Prairie"  in  its  Annual  Review  of  the  Trade 
and  Commerce  of  Chicago  for  1850  gives  some  statistics  which  are 
interesting,  although  the  figures  differ  from  those  found  elsewhere. 


[1851]  OF  THE  CITY  OF  CHICAGO  165 

Its  report  of  receipts  and  shipments  of  grain  and  flour  for  the  year 
1850  is  as  follows: 

1849  1850 

Receipts  Shipments 

Wheat,  bushels 1,936,264  873,644 

Corn,  bushels 644,848  242,285 

Oats,  bushels 26,849  158,054 

Flour,  barrels 51,309  100,872 

Lake  freights  were  low  throughout  the  year  owing  to  the  small 
quantity  of  grain  to  go  forward,  4@5  cents  being  the  prevailing 
rate  on  wheat  to  Buffalo.  Erie  Canal  freights  were  low  for  the 
same  reason,  until  near  the  close  of  the  season,  when  22@23  cents 
was  paid  on  wheat  from  Buffalo  to  New  York. 

At  the  opening  of  the  packing  season  in  October,  beef  cattle 
were  quoted  $3.00@3.50  per  hundred  pounds,  and  hogs  $2.00@2.75, 
but  at  the  close  of  December  packers  were  paying  $3.50@3.87i<2  per 
hundred  pounds  for  hogs. 

Three  Years  of  Anticipation 
1851 

Early  in  January,  1851,  a  petition  was  circulated  in  Chicago 
and  signed  by  the  produce  dealers  and  others  praying  the  legis- 
lature "for  the  passage  of  an  act  prohibiting  any  railroad  company 
from  engaging  in  the  storage,  commission  or  produce  business," 
and  setting  forth  that  the  petitioners  "have  reason  to  fear  that  a 
certain  railroad  company  is  planning  to  extend  to  this  city  a 
gigantic  monopoly"  which  "said  company  has  established  in  a 
neighboring  state  and  city"  ("Journal,"  January  10,  1851).  The 
same  trouble  appeared  in  later  years,  as  will  be  seen  hereafter. 

Numerous  railroad  projects  were  agitated  at  this  time,  most 
of  them  short  lines,  insignificant  in  themselves  except  as  they 
became  parts  of  great  trunk  systems  in  after  years.  Among  these 
were  the  projected  line  westward  from  Aurora  to  La  Salle,  which 
became  a  party  of  the  Chicago,  Burlington  &  Quincy  system ;  the 
Rock  Island  &  La  Salle,  later  expanding  into  the  Chicago,  Rock 
Island  &  Pacific  system ;  and  the  Upper  Rock  River  Valley  line, 
which  became  a  part  of  the  Chicago  &  North-Western. 

The  prevalence  of  chinch  bugs,  "fly"  and  other  pests,  as  well 
as  the  rust  which  injured  the  wheat  crop  of  northern  Illinois  in 
1849  and  1850,  induced  many  farmers  in  that  region  to  turn  their 
attention  to  corn  and  oats,  and  to  the  raising  of  cattle,  sheep  and 
hogs.     ("Journal,"  January  22,  1851.) 

On  the  7th  of  February  the  bill  to  incorporate  the  Illinois 
Central  Railroad  Company  passed  the  state  legislature  and  pro- 
vided that  the  Chicago  branch  should  leave  the  main  line  "at  a 
point  north  of  the  parallel  of  39^  degrees  north  latitude." 


166  HISTORY  OF  THE  BOARD  OF  TRADE  [1851] 

The  first  attempt  to  prevent  the  fraudulent  issuance  of  ware- 
house receipts  was  made  by  the  legislature  of  Illinois  in  the  winter 
of  1850-51.  An  act  approved  January  28,  1851,  prohibited  ware- 
housemen and  others  from  issuing  receipts  for  grain  or  other  com- 
modities unless  the  property  was  actually  in  store,  and  prohibited 
them  from  removing  or  in  any  way  encumbering  any  property 
upon  which  receipts  were  outstanding.  The  penalty  for  a  viola- 
tion of  any  of  the  provisions  of  the  act  was  a  fine  of  $1,000  and 
imprisonment  in  the  penitentiary  for  a  term  not  exceeding  five  years. 

The  third  annual  meeting  of  the  Board  of  Trade  was  held 
April  7,  1851,  at  which  time  there  were  only  thirty-eight  members 
in  good  standing,  and  the  treasurer's  books  showed  the  association 
in  debt  $165.96.  He  recommended  an  assessment  of  $4  upon  each 
member,  which  would  nearly  free  the  association  from  debt. 

The  officers  whose  terms  were  expiring  were  re-elected  to  serve 
for  another  year,  viz. : 

Charles  Walker,  President. 

John  P.  Chapin,  Vicef-President. 

Thomas  Hale,  Treasurer. 

John  C.  Dodge,  Secretary. 

Evidently  one  or  two  members  had  been  suspected  of  report- 
ing fictitious  sales,  because  a  resolution  was  passed  prohibiting 
such  rascality  upon  pain  of  expulsion.  It  was  provided  that  all 
transactions  between  members  should  be  recorded,  and  that  a  record 
should  be  kept  of  the  attendance  at  the  daily  meetings.  It  was 
also  provided  that  the  daily  session  should  be  held  from  11 :30  a.  m. 
to  12 :30  p.  m. 

The  following  extract  from  the  record  of  attendance  about  the 
middle  of  July,  1851,  shows  a  lamentable  want  of  interest: 

July     9 — Present,  C.  Walker.     No  transactions. 

July  10— Present,  C.  Walker,  J.  White,  J.  C.  Walter. 

July  12 — Present,  O.  Lunt. 

July  13 — Present,  none. 

July  14 — Present,  none. 

July  15 — Present,  C.  Walker. 

July  16 — Present,  none. 

July  17— Present,  J.  C.  Walter. 

July  18 — Present,  none. 

On  the  11th  of  April,  1851,  John  C.  Chapin,  George  Steel  and 
Thomas  Richmond,  a  committee  appointed  by  the  Board  of  Trade, 
wrote  a  pointed  and  vigorous  letter  to  the  state  trustee  of  the 
Illinois  and  Michigan  Canal,  intimating  that  inefficiency  of  the 
superintendent  was  responsible  for  the  numerous  breaks  in  the 
canal,  one  of  which  had  then  interrupted  traffic  for  several  weeks. 
Many  of  the  principal  grain  merchants  had  voiced  their  indigna- 
tion more  than  a  year  before,  but  so  little  had  been  done  to  remedy 
the  evils  of  which  they  complained  that  the  Board  of  Trade  felt 


[1851]  OF  THE  CITY  OF  CHICAGO  167 

compelled,  in  the  interest  of  the  canal  and  of  the  people  of  the 
state,  to  take  the  action  indicated.  ("Journal,"  April  14,  1851.) 
The  newspapers  ably  seconded  the  efforts  of  the  Board  of  Trade, 
and  on  the  26th  it  was  announced  that  the  break  had  been  repaired. 

Before  the  railroad  era,  when  the  location  of  cities  was  deter- 
mined by  navigable  rivers  and  other  waterways,  great  expecta- 
tions of  the  future  of  Cairo  were  entertained  by  well-informed 
people  throughout  the  country.  In  April,  1851,  soon  after  the 
Illinois  Central  Railroad  Company  had  organized  under  the  Act 
of  February  10,  1851,  the  "American  Railway  Times,"  recognizing 
the  immense  value  of  the  land  grant,  but  anticipating  that  Cairo 
rather  than  Chicago  would  reap  the  greatest  benefit  from  the  con- 
struction of  the  railroad,  published  an  article  of  which  the  following 
is  an  extract:  "The  Illinois  Central  Railroad  will  be  the  largest 
single  railway  enterprise  in  the  United  States.  Cairo,  which  is 
situated  at  the  lower  terminus  of  the  proposed  road,  at  the  junction 
of  the  Ohio  and  Mississippi  rivers,  will  in  all  probability  be  one 
of  the  largest  of  our  western  cities."    ("Journal,"  April  24,  1851.) 

The  common  council  on  the  26th  of  May  granted  the  Chicago  & 
Rock  Island  Railroad  and  the  Michigan  Southern  Railroad  right- 
of-way  into  the  city.  The  managers  of  these  two  lines  were  work- 
ing in  harmony,  and  in  June  made  an  agreement  permitting  the 
Michigan  Southern  Railroad  to  enter  the  city  over  the  tracks  of 
the  Chicago,  Rock  Island  &  Pacific.  A  little  later  in  the  year  the 
friends  of  the  Rock  Island  road  tried  to  secure  from  the, city  of 
Chicago  a  subscription  of  $100,000.00  to  the  stock  of  the  railroad, 
giving  out  the  idea  that  if  this  accommodation  were  not  granted 
the  road  might  be  built  directly  east  from  Joliet  to  the  Indiana 
state  line  and  a  junction  made  there  with  the  Michigan  Southern, 
greatly  to  the  detriment  of  Chicago.  The  common  council  approved 
the  project  so  far  as  to  submit  it  to  a  vote  of  the  people,  but  public 
sentiment  was  so  strongly  opposed  to  the  plan  that  it  was  quietly 
dropped  without  the  formality  of  a  vote,  the  result  of  which  cer- 
tainly would  have  been  adverse. 

Two  grain  warehouses  were  destroyed  by  the  fire  of  August  24, 
1851.  The  elevator  of  E.  H.  Hadduck,  with  a  capacity  of  more 
than  100,000  bushels,  was  the  largest  in  the  city.  The  warehouse 
of  H.  Norton  &  Co.  was  much  smaller. 

There  was  great  rivalry  between  the  Michigan  Central  Rail- 
road Company  and  the  Michigan  Southern  and  Northern  Indiana, 
both  of  which  were  building  with  all  possible  speed  to  reach  Chicago, 
the  former  from  Detroit  and  the  latter  from  Toledo.  Some  time 
in  April  the  Michigan  Central  made  arrangement  with  the  Illinois 
Central  Railroad  Company  by  which  the  latter  agreed  to  deflect 
its  branch  line  from  Chicago  to  Cairo  far  enough  to  the  east  to 
touch  the  Indiana  state  line  at  the  point  where  the  Michigan  Cen- 
tral proposed  to  cross  into  the  state  of  Illinois. 


168  HISTORY  OF  THE  BOARD  OF  TRADE  .   [1851] 

This  action  was  plainly  a  violation  of  the  intent  of  the  charter 
of  the  Illinois  Central,  and  on  the  29th  of  September  the  common 
council  appropriated  $10,000.00  to  defray  the  expense  of  a  fight  to 
prevent  this  outrage  on  the  people  of  Chicago.  The  officers  of  the 
Illinois  Central  soon  saw  the  necessity  of  complying  with  the 
wishes  of  the  people  of  Chicago,  and  on  the  18th  of  October  it  was 
announced  in  the  "Journal"  that  they  would  run  their  line  direct 
to  Chicago,  keeping  west  of  Calumet  Lake.  The  well-known 
opinion  of  Senator  Douglas  that  "neither  the  Illinois  Central  nor 
the  Rock  Island  Railroad  could,  if  they  would,  under  the  terms 
of  their  charters,  make  a  connection  at  the  Indiana  state  line  as  a 
terminus,  but  that  both  roads  must  have  a  terminus  in  Chicago," 
contributed  much  to  the  successful  issue  of  this  contest  between 
the  railroad  and  the  people  of  Chicago.    (Andreas,  Vol.  I,  page  156.) 

The  general  banking  law  was  submitted  to  a  vote  of  the  people 
of  the  state  on  the  4th  of  November  and  carried  by  a  majority  of 
9,284.     ("Journal,"  November  14.) 

Early  in  November  the  "Tribune"  published  a  statement  of 
the  beef-packing  business  of  Chicago  for  the  year  1851.  The  num- 
ber of  cattle  slaughtered  was  30,800,  and  the  number  of  barrels 
of  beef  packed  by  each  of  the  firms  engaged  in  the  business  is  given, 
as  follows: 

G.  S.  Hubbard 12,000 

S.  Marsh  8,000 

Wadsworth,  Dyer  &  Co 6,000 

R.  M.  Hough 7,000 

Reynolds  &  Hayward 6,000 

Maher  &  Tobey 5,600 

Curry  &  McNally 8,000 

Clybourne  &  Ellis 7,000 

Total 59,600 

It  was  charged  that  the  figures  given  above  were  much  exag- 
gerated. Probably  they  were,  Colbert's  figures  being  very  much 
lower,  as  were  those  of  the  "Democratic  Press,"  published  in  1852 
(21,806),  which  Andreas  has  adopted;  but  they  were  the  result  of 
an  honest  effort  to  get  the  truth. 

A  convention  met  in  Peoria  on  the  26th  of  November  to  urge 
upon  Congress  the  necessity  and  the  justice  of  suitable  appropria- 
tions for  improvement  of  the  Illinois  River.  The  Board  of  Trade 
sent  a  number  of  delegates  to  the  convention  and  Charles  Walker, 
president  of  the  Board,  was  elected  president  of  the  convention. 
A  committee  was  appointed  to  prepare  a  memorial  to  Congress, 
fortified  with  the  necessary  statistics. 

The  common  council  of  Chicago  at  its  meeting  on  the  29th  of 
December  passed  an  ordinance  granting  the  Illinois  Central  Rail- 


[1851]  OF  THE  CITY  OF  CHICAGO  169 

road  Company  right-of-way  along  the  lake  shore  from  Thirty-ninth 
Street  to  Twelfth  Street,  and  thence  to  the  Chicago  River;  also 
granting  the  right  to  construct  a  bridge  across  the  main  river  to 
the  north  side,  and  to  lay  a  track  on  or  south  of  Twelfth  Street, 
to  cross  the  South  Branch,  to  lay  a  track  on  both  sides  of  the 
South  Branch,  and  on  both  sides  of  the  main  river. 

In  an  interesting  review  of  the  business  of  Chicago  for  the  year 
1851  the  "Journal"  of  December  30  gives  the  following  statistics 
of  the  receipts  and  shipments  of  certain  articles.  The  "Journal's" 
figures  dilTer  widely  from  those  adopted  by  other  authorities,  but 
are  deemed  worthy  of  preservation. 

RECEIPTS 

Flour,  by  lake,  barrels 5,063 

Flour,  by  canal,  barrels 5,819 

Flour,  by  railroad,  barrels 39,646 

Flour,  by  teams,  barrels 750 

Total    51,278 

Wheat,  by  lake,  bushels 9,061 

Wheat,  by  canal,  bushels   67,951 

Wheat,  by  railroad,  bushels 274,939 

Wheat,  by  teams,  bushels 232,619 

Total   584,570 

Corn,  by  canal,  bushels  2,352,016 

Corn,  by  railroad,  bushels 300,387 

Corn,  by  teams,  bushels    168,266 

Total   2,820,669 

Oats,  by  lake,  bushels   

Oats,  by  canal,  bushels   181,292 

Oats,  by  railroad,   bushels    150,592 

Oats,  by  teams,  bushels   190,160 

Total   522,042 

Barley,  by  lake,  bushels    6,965 

Barley,  by  canal,  bushels 268 

Barley,  by  railroad,  bushels 22,396 

Barley,  by  teams,   bushels    10,147 

Total    39,776 


170                     HISTORY  OF  THE  BOARD  OF  TRADE  [1851] 

SHIPMENTS 

Flour,  by  lake,  barrels 41,519 

Flour,  by  canal,    barrels    777 

Total   42,296 

Wheat,  by  lake,  bushels   287,719 

Corn,  by  lake,  bushels  2,531,671 

Oats,  by  lake,  bushels   567,200 

Oats,  by  canal,  bushels   108 

Total  oats 567,308 

Barley,  by  lake,  bushels    10,020 

Barley,  by  canal,  bushels   11,460 

Total   21,480 

Receipts  of  lumber  were  105,000,000  square  feet. 
Shipments  by  canal,  square  feet,  52,186,645;  by  railroad,  square 
feet,  13,040,892.    Total,  65,227,537. 

Receipts  and  shipments  of  grain  and  lumber  in  1850  and  1851 
compare  as  follows : 

RECEIPTS 

1850  1851 

Flour,  barrels   70,699  51,278 

Wheat,  bushels 1,165,480  584,570 

ICorn,  bushels 258,310  2,820,669 

I  Oats,  bushels 162,53§  522,042 

Barley,  bushels 9,927  39,776 

Lumber,  square  feet 85,000,000         105,000,000 

SHIPMENTS 

1850  1851 

Flour,  barrels   100,871  42,296 

Wheat,  bushels 883,643  287,719 

Corn,  bushels    262,212  2,531,671 

Oats,  bushels   158,070  567,308 

Barley,  bushels  22,872  21,480 

Lumber,  square  feet 47,189,623  65,227,537 

The   quantity   of    flour   manufactured    in    Chicago    in    1851    is 
reported  thus : 

By  the  Hydraulic  mills,  barrels 20,000 

By  the  Marine  mills,  barrels 20,831 

By  the  Chicago  mills,  barrels 20,000 

Total   60,831 


11851]  OF  THE  CITY  OF  CHICAGO  171 

There  were  at  the  close  of  1851,  150  boats  on  the  canal, 
and  the  number  of  passengers  carried  during  the  year  was 
47,699. 

The  amount  of  tolls  collected  was  $173,390.34,  against  $124,- 
972.49  in  1850. 

The  discrepancy  between  the  figures  given  in  the  "Review" 
and  those  derived  from  other  sources  illustrates  the  impossibility 
of  ascertaining  the  exact  truth.  One  of  the  important  facts,  how- 
ever, is  that  there  was  a  marked  falling  oS  in  receipts  of  wheat, 
due  in  part,  perhaps,  to  the  very  low  price  of  spring  wheat  in  the 
last  four  months  of  the  year,  at  a  time  when  corn  was  in  demand 
and  frequently  selling  above  the  market  for  the  lower  grades  of 
wheat.  Another  important  fact  was  the  astounding  increase  in 
receipts  of  corn,  which  were  more  than  ten  times  as  great  as  in 
1850. 

Receipts  of  oats  increased  more  than  threefold,  and  the  move- 
ment of  lumber  showed  a  gratifying  increase.     Until  1851  Toledo 
had  been  the  greatest  primary  market  for  corn,  but  Chicago  then  ' 
took  the  lead  and  never  has  lost  it. 

Moderate  prices  for  wheat  prevailed  in  the  early  part  of  the 
year,  60@8S  cents  per  bushel  for  winter  wheat  and  45@63  cents 
for  spring  wheat  being  the  range  until  near  the  1st  of  July,  when 
the  good  crop  prospect  brought  about  a  decline  which  carried 
spring  wheat  down  to  27@37  cents  at  the  end  of  October, 
and  winter  wheat  to  45@60  cents.  The  last  quotations  of  the 
year  are  50@60  cents  for  winter  and  31@35  cents  for  spring 
wheat. 

Corn  was  worth  35  cents  at  the  opening  of  the  year,  and  did 
not  fall  below  that  price  nor  rise  above  40  cents  until  the  latter 
part  of  July,  although  some  heated  corn  sold  at  lower  prices.  It 
declined  to  26  cents  in  November,  but  was  worth  29@30  cents  at  the 
close  of  the  year. 

There  was  a  noticeable  increase  in  the  quantity  of  corn  sold 
for  future  delivery,  especially  during  the  months  of  March  and 
April,  when  several  sales  for  June  delivery  were  made. 

Oats  were  29@30  cents  per  bushel  at  the  beginning  of  the 
year,  and  were  comparatively  steady  at  27@32  cents  as  the  extremes 
until  the  latter  part  of  June,  when  they  sold  at  25  cents.  In  the 
latter  part  of  August  they  declined  to  17@19  cents,  in  October 
to  16  cents,  and  16@17  cents  is  the  closing  quotation  of  the 
year. 

At  the  opening  of  navigation  in  April,  freight  on  corn  to 
Buffalo  was  8@9  cents  per  bushel,  and  this  was  the  prevailing  rate 
until  June,  when  5  cents  was  accepted  on  corn  and  6^^  cents  on 
wheat.  In  August  and  September,  charters  were  made  as  low  as 
4  cents  on  corn.  In  October  6@8  cents  on  corn,  and  in  Novem- 
ber, 9  cents  was  paid  on  wheat  to  Buffalo. 


172  HISTORY  OF  THE  BOARD  OF  TRADE  [1852J 

Packers  paid  $3.75@4.00  per  hundred  pounds  for  hogs  in 
January,  1851,  and  these  prices  prevailed  until  the  close  of  the 
packing  season,  with  an  extra  20  cents  occasionally  added  for  very 
heavy  stock. 

During  the  year  a  brisk  trade  in  live  cattle  for  the  eastern 
markets  developed  in  Chicago,  Mr.  Felt,  of  Utica,  N.  Y.,  taking  the 
lead  in  this  trade  and  shipping  his  cattle  by  steamer  to  Buffalo. 

1852 

The  20th  of  February,  1852,  was  a  red  letter  day  in  the  history 
of  Chicago.  The  first  train  from  the  East  arrived  on  the  Michigan 
Southern  Railroad  and  was  saluted  by  Captain  Swift's  artillery 
and  welcomed  by  a  large  concourse  of  enthusiastic  citizens.  Three 
months  later  (May  21)  the  first  Michigan  Central  railroad  train 
arrived  in  Chicago  from  Detroit. 

The  fourth  annual  meeting  of  the  Board  of  Trade  was  ad- 
journed from  Monday,  April  5,  until  the  8th,  "owing  to  the  inclem- 
ency of  the  weather  and  consequent  scarcity  of  members  present," 
as  the  "Democrat"  explained.  At  this  meeting  the  Board  occupied 
for  the  first  time  rooms  previously  rented  at  the  corner  of  Clark 
and  South  Water  Streets.  There  had  been  a  gain  of  fifteen  in  the 
membership  during  the  year  and  the  association  was  out  of  debt. 

The  following  officers  were  elected  : 

President,  George  Steele. 
Vice-President,  Thomas  Hale. 
Secretary  and  Treasurer,  John  C.  Dodge. 

The  members  were  dissatisfied  with  the  location  at  Clark  and 
South  Water  Streets  and  decided  to  move  to  No.  3  Tremont  Block, 
where  the  next  meeting  of  the  Board  was  held. 

At  their  meeting  on  the  15th  the  Board  voted  to  meet  daily 
on  'Change  at  11 :30  a.  m. 

It  had  become  a  custom  of  grain  buyers  who  bought  from 
farmers'  teams  to  demand  60  pounds  of  shelled  corn  for  a  bushel, 
and  considerable  confusion  was  produced  in  the  sales  between 
merchants  by  the  necessity  of  specifying  "60  pounds,"  or  "56 
pounds,"  whenever  a  cargo  was  sold.  During  the  year  1852  most 
of  the  quotations  are  for  60  pounds,  but  it  was  agreed  by  the  corn 
buyers,  in  the  latter  part  of  August,  that  on  and  after  the  30th  of 
that  month  56  pounds  should  be  the  standard  bushel.  This  did 
not  settle  the  question,  however,  and  on  the  20th  day  of  October  a 
meeting  of  produce  buyers,  of  which  Gordon  Pease  was  chairman, 
resolved  to  adhere  to  what  they  claimed  was  "the  long  acknowl- 
edged and  most  convenient  standard  of  purchasing  small  grains  at 
60  pounds  per  bushel,"  and  further  resolved  that  they  "would  refuse 
to  recognize  as  a  buyer  in  this  market  any  individual  who  may 
purchase  rye  or  corn  at  less  than  the  said  standard  of  60  pounds." 


£1852]  OF  THE  CITY  OF  CHICAGO  173 

Both  standards  continued  to  be  used,  and  of  course  prices  varied 
accordingly. 

Trains  began  running  over  the  Galena  &  Chicago  Union  Rail- 
road to  Rockford  on  the  2nd  of  August,  adding  the  fertile  Rock 
River  Valley  to  the  country  tributary  to  Chicago.  The  Chicago  & 
Rock  Island  was  finished  to  Joliet,  and  train  service  begun  to  that 
point  November  22.  It  was  announced  that  the  road  would  be 
completed  to  Morris  about  the  first  of  January. 

These  short  lines  of  railroad  to  the  west  and  southwest,  to- 
gether with  the  two  lines  from  the  east  already  mentioned,  made 
Chicago  quite  a  railroad  center  at  the  close  of  1852,  although  the 
territory  from  which  it  drew  its  grain  and  beef  and  pork  was  still  ' 
limited,  for  the  most  part,  to  northern  Illinois,  a  little  of  southern 
Wisconsin,  and  a  small  part  of  eastern  Iowa. 

It  was  ten  months  from  the  time  the  Michigan  Southern 
ran  its  first  train  into  Chicago  before  rail  communication  was 
opened  from  Toledo  to  the  eastern  seaboard  cities  and  Chicago 
had  an  all-rail  line  to  New  York,  Philadelphia,  Pittsburgh  and 
Cincinnati. 

No  important  action  was  taken  by  the  Board  of  Trade  during 
the  year  1852.  Its  old  habit  of  expressing  its  views  upon  all 
public  questions  appears  to  have  fallen  into  desuetude,  partly,  per- 
haps, on  account  of  the  greater  demands  of  business  upon  the  time 
and  thought  of  members.  New  banks,  new  railroads  projected  and 
begun,  new  lines  of  industry,  and  a  rapidly  increasing  population 
made  the  glorious  destiny  of  the  city  manifest  to  all  except  the 
most  hopeless  pessimist,  and  left  the  average  Board  of  Trade  man 
little  time  to  indulge  in  political  or  philosophical  speculation. 

The  number  of  cattle  slaughtered  and  packed  in  Chicago  dur- 
ing the  year  1852,  according  to  a  review  of  the  industry  published 
by  the  "Democratic  Press,"  December  13,  was  as  follows : 

Head 

By  Thomas  Dyer  3,714 

By  Sylvester  Marsh 2,372 

By  R.  M.  Hough  &  Co 5,600 

By  G.  S.  Hubbard 4,896 

By  Reynolds  &  Hayward 2,974 

By  F.    L.   Kent 2,413 

By  O.   H.   Tobey 1,794 

By  Joel  Ellis  &  Co 600 

Add  300  head  to  be  slaughtered  before  January  1 . . .  300 

24,663 

This  is  an  increase  of  2,857  over  the  previous  year,  when  the 
number,  according  to  the  "Democratic  Press,"  was  21,806. 


174  HISTORY  OF  THE  BOARD  OF  TRADE  [18S2J 

The  writer  estimated  that  the  total  number  packed  during  the 
year  would  have  been  "at  least  30,000  had  it  not  been  for  the  large 
shipments  that  have  been  made  of  live  cattle  to  eastern  markets." 
His  figures  indicate  that  more  than  5,000  live  cattle  were  shipped 
to  the  East  during  the  year.  He  makes  the  interesting  statement 
that  "Chicago  Mess  Beef  will  command  in  eastern  markets  from 
one  to  two  dollars  per  barrel  more  than  any  other."  Three  thou- 
sand tierces  of  beef  packed  in  Chicago  were  shipped  to  the  London 
market  by  Thomas  Dyer  and  R.  M.  Hough  &  Co.,  and  most  of 
the  remainder  of  the  packing  went  to  New  York,  Boston  and  New 
Bedford.  The  total  amount  packed  was  equal  to  46,395  bar- 
rels. The  average  rate  paid  for  cattle  during  the  season  was 
$4.00@4. 123/2  per  hundred  pounds.  The  cattle  packing  season 
opened  about  the  1st  of  October  and  closed  about  the  20th  of 
November. 

Beginning  with  the  year  1852,  more  reliance  can  be  placed  upon 
the  statistics  of  receipts  and  shipments  of  grain,  flour,  cattle  and 
hogs.  Prior  to  this  time  the  figures,  conflicting  as  they  are,  give  a 
good  general  idea  of  the  comparative  movement  from  year  to  year; 
but  beginning  with  1852  greater  care  was  taken  in  the  compilation 
of  these  tables,  and  Colbert's  figures,  given  above,  said  by  that 
author  to  have  been  based  upon  the  Board  of  Trade  Report,  are 
accepted  by  all  historians  as  authoritative. 

According  to  these  figures,  the  grain  business  of  Chicago  in 
1852  differed  materially  from  that  of  the  preceding  year  only  in 
the  movement  of  oats,  of  which  about  three  times  as  many  bushels, 
as  in  1851  were  shipped,  most  of  them  going  to  Bufifalo  by  lake. 
The  business  done  by  the  Illinois  and  Michigan  Canal  was  some- 
what less  than  in  1851.  Apparently  the  movement  of  flour  in  and 
out  of  Chicago  fell  ofif  slightly,  while  wheat  increased  moderately 
and  corn  showed  little  change.  Accepting  Colbert's  figures  for  the 
beef  packing  of  1851,  viz.,  21,806  head,  there  was  a  fair  increase  in 
this  industry,  as  there  certainly  was  in  the  number  of  hogs  packed, 
which  was,  according  to  the  same  author,  44,156  (a  typographical 
error  for  48,156,  probably). 

The  most  noteworthy  price  changes  were  in  live  stock  and  in 
the  grains  which  are  fed  to  cattle  and  hogs.  During  November  and 
December,  1852,  packers  were  paying  nearly  50  per  cent  more  for 
desirable  hogs  than  in  the  corresponding  months  of  the  previous, 
year,  and  about  20  per  cent  more  for  cattle.  Good  hogs  were  quoted 
in  December  at  $5.50@6.25  per  hundred  pounds,  and  good  cattle 
at  $4.00@4.50,  although  much  higher  prices  had  been  paid  for  choice 
cattle  earlier  in  the  year. 

At  the  opening  of  the  year,  winter  wheat  was  quoted  50@65 
cents  per  bushel,  and  spring  wheat  32@45  cents.  The  former  was 
steady  within  a  range  of  50@75  cents,  the  average  perhaps  65@70 
cents,  until  late  in  the  year,  when,  in  consequence  of  bad  harvests 


[1853]  OF  THE  CITY  OF  CHICAGO  175 

in  Europe,  80@85  cents  was  paid,  the  year  closing  with  good 
samples  quoted  72@80  cents.  The  range  on  spring  wheat  was 
31@50  cents  until  September,  when  60  cents  was  paid;  71  cents 
was  the  highest  price  of  the  year,  November  18th,  from  which  it 
declined  and  was  quoted  55@60  cents  in  December. 

Corn  was  worth  26  cents  a  bushel  in  January,  1852,  but  ad- 
vanced to  35  cents  before  the  end  of  the  month,  and  sold  between 
32  and  36  cents  until  the  latter  part  of  July,  when  it  advanced 
to  40@43  cents,  which  was  about  one  cent  above  the  price  of  spring 
wheat  at  that  time.  It  again  advanced  in  August  and  sold  as  high 
as  56  cents,  spring  wheat  being  quoted  at  40@50  cents  per  bushel 
the  same  day.  Corn  and  spring  wheat  kept  pretty  close  company  in 
price  during  September,  October  and  November.  In  November 
corn  touched  61  cents  (for  60  pounds),  the  highest  point  of  the 
year. 

Oats  sold  at  17@20  cents  per  bushel  during  the  first  four 
months  of  the  year,  22@2534  cents  in  May  and  June,  23@28^ 
cents  in  July,  23@28^  cents  in  August,  27@32  cents  in  September, 
27@32j^  cents  in  October.  Thirty-six  cents  was  paid  in  November, 
and  the  last  quotation  of  the  year  was  34@35  cents. 

The  opening  of  navigation  was  late  in  the  spring  of  1852,  the 
grain  warehouses  in  Chicago  were  full,  and  as  a  result  the  first 
charters  to  Bufifalo  were  made  at  12  cents  a  bushel  on  corn,  but 
this  rate  could  not  be  maintained,  and  before  the  end  of  iVIay,  9^ 
cents  was  the  going  rate.  In  June  and  the  early  part  of  July,  73^@9 
cents  was  paid  on  corn  to  Buffalo,  but  in  August,  3j4@4^  cents 
was  accepted.  After  the  new  crops  began  to  move  in  September, 
freights  advanced  to  6@7  cents  on  corn,  and  in  November  8  cents 
was  paid. 

On  the  Erie  Canal,  12  cents  on  corn  from  Bufifalo  to  New  York 
was  the  earliest  rate  reported  to  the  Chicago  newspapers,  and  12@ 
\2y2  cents  was  the  ruling  rate  until  August,  when  shipments  were 
made  at  11  cents.    In  September,  14  cents  was  paid. 

The  harvests  of  the  year  1852  in  Chicago  territory,  were  fairly 
abundant,  and  the  high  price  of  corn  and  oats  in  the  autumn  was 
due  to  deficiency  in  the  European  crops  rather  than  to  local  condi- 
tions, although  the  demand  for  flour,  corn  and  oats  for  the  lumber 
camps  of  Michigan  and  Wisconsin  was  an  important  factor  just 
before  the  close  of  navigation. 

1853 

The  first  bank  to  take  advantage  of  the  General  Banking  Law, 
which  had  been  ratified  by  the  people  of  Illinois  in  November,  1851, 
was  the  Marine  Bank,  organized  January  13,  1852.  Before  the 
close  of  the  year  eight  others  incorporated  under  the  law  and  began 
to  issue  currency.  Certificates  of  the  Wisconsin  Marine  and  Fire 
Insurance  Company,  to  a  large  amount,  were  still  in  circulation. 


176  HISTORY  OF  THE  BOARD  OF  TRADE  [1853] 

and  naturally  there  was  a  conflict  of  interest  and  some  antagonism 
between  the  new  banks  and  George  Smith,  the  shrewd  Scotchman, 
whose  rich  preserves  they  were  invading.  The  newspapers  and 
politicians  who  were  opposed  to  all  banks,  fomented  the  trouble, 
and  unexpectedly  a  bill  repealing  the  General  Banking  Law  passed 
the  upper  house  of  the  Illinois  legislature,  January  31,  1853.  Before 
it  was  considered  by  the  House  of  Representatives,  however,  the 
Board  of  Trade  held  a  meeting  and  through  its  committee,  ex-Mayor 
Woodworth  and  Thomas  Dyer,  adopted  a  series  of  resolutions 
vigorously  protesting  against  a  repeal  of  the  law.  The  law  was 
not  repealed,  but  an  Act  approved  February  10  corrected  some 
abuses  in  a  way  entirely  satisfactory  to  its  friends. 

It  was  announced  at  this  meeting  that  in  future  the  Board 
of  Trade  would  meet  at  No.  8  Dearborn  Street,  upstairs  in  "the 
office  heretofore  occupied  by  the  Chicago  Mutual  Insurance  Com- 
pany." 

On  the  14th  of  February  the  Chicago  &  Rock  Island  Railroad 
was  finished  to  Ottawa,  and  on  the  10th  of  March  to  La  Salle. 

On  the  19th  of  February,  John  C.  Dodge  resigned  his  office 
as  secretary  and  treasurer  of  the  Board  of  Trade  and  James  E. 
Dalliba  was  chosen  to  fill  the  position  until  the  annual  election 
in  April. 

One  of  the  local  papers  ("Journal,"  January  14)  attributed  the 
dullness  in  the  grain  trade  to  the  real  estate  excitement  which  pre- 
vailed in  the  winter  of  1852-53.  The  commercial  editor  says,  "The 
excitement  in  the  real  estate  market  has  in  a  great  measure  diverted 
the  attention  of  produce  dealers,  so  that  no  very  heavy  operations 
may  be  looked  for  at  present." 

Another  reason  doubtless  was  that  large  quantities  of  grain 
were  held  along  the  canal  and  railroads  awaiting  the  opening  of 
navigation,  the  owners  hoping  that  St.  Louis  might  prove  a  better 
market  for  them  than  Chicago,  as  she  had  done  three  years  before. 
Because  of  this  tendency  to  hold  grain  in  country  warehouses  there 
was  in  store  in  Chicago,  March  8,  1853,  only  40,000  bushels  of 
wheat  and  30,000  bushels  of  oats.  Milwaukee  had  225,000 
bushels  of  wheat  in  store  on  the  20th  of  March,  and  the  Milwaukee 
Board  of  Trade  reported  the  shipment  of  wheat  from  that  port 
for  the  year  (ending  in  March)  394,386  bushels,  not  very  far  in 
the  rear  of  Chicago  with  its  635,496  bushels.  At  all  events,  the 
people  of  Milwaukee  had  some  ground  for  considering  their 
beautiful  city  still  in  the  race  with  Chicago,  so  far  as  wheat  was 
concerned. 

The  48,156  hogs  packed  in  Chicago  in  1852  gave  her  the  lead 
in  this  branch  of  industry  in  Illinois,  although  in  a  review  of  the 
business  published  in  the  local  press,  Beardstown  was  credited  with 
38,700,  Peoria  38,000  and  Alton  27,000,  out  of  a  total  for  the  state 
of  325,850. 


[1853]  OF  THE  CITY  OF  CHICAGO  177 

The  fifth  annual  meeting  of  the  Board  of  Trade  was  held  in 
the  new  rooms,  No.  8  Dearborn  Street,  April  4,  1853,  when  the 
following  officers  were  elected,  viz. : 

President,  Thomas  Hale. 
Vice-President,  Charles  H.  Walker. 
Secretary  and  Treasurer,  L.  P.  Hilliard. 

It  was  voted  to  change  the  hour  of  meeting  to  10  o'clock  a.  m., 
and,  in  the  hope  of  increasing  the  attendance,  Secretary  Hilliard 
was  directed  to  provide  a  free  lunch  of  crackers,  cheese  and  ale 
for  such  members  as  should  attend  the  daily  meetings. 

The  president  appointed  the  following  standing  committee : 
Thomas  Richmond,  Julius  White,  A.  G.  Throop,  W.  D.  Houghteling, 
J.  P.  Chapin,  Joel  C.  Walter,  J.  W.  Duncan. 

The  annual  meeting  then  adjourned  to  meet  on  Monday, 
April  11,  thereby  giving  the  committee  time  to  prepare  a  report 
upon  several  matters  of  interest. 

At  the  adjourned  meeting  on  the  11th,  the  standing  committee 
made  a  report  recommending  that  "a  special  committee  of  three 
be  appointed  to  confer  with  parties  who  are  about  erecting  build- 
ings, with  a  view  to  procure  suitable  rooms"  for  the  Board.  The 
committee  also  urged  that  "effort  ought  to  be  made  by  members 
generally  to  induce  a  larger  portion  of  our  business  men  to  become 
members."  They  further  recommended  the  appointment  of  a  com- 
mittee to  prepare  and  secure  the  adoption  of  a  uniform  scale  of 
charges  for  storage,  wharfage,  commission,  etc. 

But  the  most  important  action  proposed  by  the  standing 
committee  was  the  passage  of  a  resolution  setting  forth  "that 
the  commerce  of  Chicago,  amounting  the  last  year  *  *  *  to 
$30,000,000.00,  furnishes  conclusive  evidence  that  the  facilities 
afforded  by  our  banking  institutions  are  wholly  inadequate  to  the 
necessities  of  the  trade."  The  resolutions  then  strongly  endorse 
a  proposition  for  the  establishment  of  a  bank  in  this  city  with  a 
capital  of  two  millions  of  dollars,  and  earnestly  commend  the  enter- 
prise to  the  favorable  consideration  of  the  public,  with  the  wish  for 
its  speedy  establishment. 

The  Act  of  the  Legislature,  approved  February  10,  explaining 
and  amending  the  General  Banking  Law,  to  which  reference  has 
been  made,  was  to  become  effective  on  the  1st  of  August.  By  its 
provisions  the  circulation  in  Illinois  of  such  currency  as  the  cer- 
tificates of  the  Wisconsin  Fire  and  Marine  Insurance  Company  was 
prohibited,  and  as  these  certificates  composed  a  large  part  of  the 
circulating  medium  in  Chicago  at  that  time,  it  was  apparent  that 
when  they  were  driven  out  there  would  be  a  scarcity  of  currency 
which  the  newly  organized  banks,  with  their  limited  capital,  could 
not  replace.     Numerous  editorials  and  communications  upon  the 


178  HISTORY  OF  THE  BOARD  OF  TRADE  [18531 

subject  appeared  in  the  local  press,  and  the  action  of  the  Board  of 
Trade  was  public-spirited  and  wise. 

At  a  meeting  held  on  the  16th  of  April,  the  Board  of  Trade 
adopted  a  rule  that  all  questions  arising  between  the  members  in- 
volving pecuniary  considerations  must  be  submitted  to  a  committee 
of  the  Board  for  decision.  Either  party  to  the  arbitration  was 
privileged  to  appeal  from  the  decision  (presumably  to  the  Board 
of  Directors).  The  following  rates  of  commission  were  estab- 
lished : 

For  purchasing  grain  by  cargoes,  funds  in  hand ^^c  per  bu. 

For  purchasing  grain  by  cargoes,  without  funds Ic  per  bu. 

Sales  of  grain  by  boat  load  without  advances }^c  per  bu. 

Sales  of  produce  or  other  property 2j^  per  cent 

Purchasing  provisions  in  quantities,  per  barrel 1  per  cent 

Purchasing  other  property  on  orders 2yi  per  cent 

Advancing  on  produce  or  other  property 2^  per  cent 

Guaranteeing  sales  2j/i  per  cent 

At  a  meeting  of  the  Board  of  Trade  held  April  27th,  the  com- 
mittee of  which  W.  D.  Houghteling  was  chairman,  charged  with 
considering  the  subject  of  rates  of  storage,  reported  it  inexpedient 
to  take  any  action,  and  asked  to  be  discharged. 

The  bar  at  the  mouth  of  the  harbor  was  a  source  of  constant 
annoyance  to  navigators,  and  as  Congress  failed  to  make  an  appro- 
priation for  the  needs  of  the  Chicago  harbor,  the  common  council, 
in  one  of  its  liberal  moments,  actually  appropriated  $300.00  to 
remove  the  obstructions,  "provided  those  engaged  in  commerce 
will  agree  to  keep  the  channel  open  during  the  season." 

At  the  opening  of  navigation,  tolls  on  the  Welland  Canal  were 
reduced  about  seven-eighths  of  a  cent  per  hundred  pounds  on  com, 
rye,  oats  and  many  other  articles,  but  the  rate  on  wheat  was  un- 
changed. Wheat,  flour  and  corn  passing  through  the  Welland 
Canal  and  paying  toll  were,  however,  given  free  passage  through 
the  St.  Lawrence  canals. 

When  the  amended  banking  law  went  into  operation  on  the 
1st  of  August,  George  Smith,  the  Scotch  banker,  who  had  organized 
the  Bank  of  Atlanta  under  the  laws  of  Georgia,  tried  to  force  the 
issues  of  this  institution  into  circulation  in  Chicago  and  elsewhere, 
and  the  Whig  newspapers  accused  him  of  locking  up  the  small  bills 
of  local  banks  as  a  part  of  this  "conspiracy."  Public  opinion  did 
not  sustain  his  attempt  to  evade  the  law,  and  he  finally  abandoned 
the  effort,  after  a  long  and  bitter  struggle. 

On  the  17th  of  October  the  Chicago  &  Mississippi  Railroad 
was  finished  from  Bloomington  to  Alton,  giving  Chicago  its  first 
all-rail  route  to  the  Mississippi  River.     It  was  not  very  direct,  but 


[1853]  OF  THE  CITY  OF  CHICAGO  179 

it  was  notable  as  the  first.  Passengers  for  St.  Louis  could  take  the 
Chicago  &  Rock  Island  Railroad  to  La  Salle,  connect  there  with 
the  Illinois  Central  for  Bloomington,  and  at  Bloomington  with  the 
Chicago  &  Mississippi  for  Alton,  where  a  fast  steamer  in  waiting 
would  convey  them  to  the  Missouri  metropolis,  the  whole  journey 
consuming  only  sixteen  hours. 

On  the  31st  of  October  the  local  newspapers  announced  the 
completion  of  the  Aurora  Extension  to  its  junction  with  the  Illinois 
Central  at  what  is  now  Mendota,  fifteen  or  sixteen  miles  north  of 
La  Salle. 

The  Chicago  &  Galena  Union  was  finished  to  Freeport  on 
the  4th  of  September. 

The  year  1853  was  one  of  unexampled  prosperity  in  Chicago. 
The  population  increased  about  S7  per  cent,  and  more  than  60,000 
persons  now  called  Chicago  their  home.  A  wider  acquaintance 
with  the  "manifest  destiny"  of  the  city  as  the  great  central  mart 
of  the  Union  caused  a  speculative  advance  in  prices  of  real  estate, 
which  the  rapid  extension  of  the  railway  systems  tributary  to 
Chicago  fully  justified.  The  extension  of  the  railroads  which  had 
their  terminals  in  Chicago  was  really  of  less  importance  in  itself 
than  the  fact  that  as  they  extended  westward  and  southward  they 
met  or  crossed  other  roads  intended  to  run  elsewhere  but  which 
found  a  Chicago  outlet  indispensable.  Chicago  at  the  close  of  1853 
had  reached  the  commanding  station  where  every  railroad  line, 
present  or  prospective,  north  of  the  Ohio  River  and  west  of  the 
Wabash,  whatever  its  ostensible  goal,  found  that  it  must  have  an 
outlet  to  the  markets  of  that  city  for  the  produce  of  the  farms  along 
its  right-of-way.  The  main  line  of  the  Illinois  Central  already  had 
three  such  connections,  one  over  the  Chicago  &  Rock  Island  at 
La  Salle,  another  over  the  Aurora  Extension  at  Mendota,  and  an- 
other over  the  Galena  &  Chicago  Union  at  Freeport,  with  the 
certainty  in  the  very  near  future  of  another  at  Centralia  over  the 
Chicago  branch  of  the  Illinois  Central,  and  a  fifth  at  Dixon,  to 
which  the  Air  Line  Division  of  the  Galena  &  Chicago  Union  Rail- 
road was  projected  and  building.  Every  week  added  to  Chicago 
territory,  either  through  the  extension  of  its  own  direct  lines  or 
the  junction  of  these  with  other  railroads  built  to  divert  trade 
from  Chicago,  or,  to  say  the  least,  without  any  reference  to  Chicago, 
but  forced  by  the  logic  of  the  situation  to  become  tributary  to  that 
city  because  it  was  the  best  market. 

Although  at  the  close  of  1853  the  five  trunk  lines  running  out 
of  Chicago  had  less  than  a  thousand  miles  of  railway  in  operation, 
nearly  seven  times  as  many  more  miles  were  in  process  of  con- 
struction on  these  or  connecting  roads,  of  which  it  was  expected 
about  one-half  would  be  finished  by  the  close   of  the  year   1854. 

The  railroad  connections  to  which  reference  has  been  made 
were  completed  too  late  in  the  season  to  have  much  effect  upon 


180  HISTORY  OF  THE  BOARD  OF  TRADE  [1853] 

the  grain  trade  of  the  year,  but  it  was  apparent  to  everyone  that  a 
marvelous  expansion  of  this  trade  was  certain  to  develop  in  the 
immediate  future. 

As  wheat  (including  flour)  was  the  chief  article  of  shipment 
from  Chicago  by  lake  from  1842  until  1851,  when  corn  became  a 
candidate  for  first  place,  and  as  these  two  articles  held  their  position 
at  the  head  of  Chicago's  exports  for  many  years,  a  word  about  the 
foreign  trade  of  the  United  States  in  these  leading  cereals  prior  to 
the  close  of  1853  is  not  out  of  place  here.  Important  as  the  grain 
trade  of  Chicago  had  become,  and  rapid  as  its  growth  had  been, 
all  the  development  hitherto  had  been  only  an  earnest  of  the 
greater  conquests  to  come.  The  close  of  the  year  1853  divides  the 
period  of  prophecy  from  the  years  of  fulfilment. 

Before  the  Revolution  the  American  colonies  produced  a  small 
surplus  of  wheat  and  exported  most  of  it  in  the  form  of  flour.  In 
1767  Philadelphia  exported  198,516  barrels  of  flour  and  367,500 
bushels  of  wheat:  in  1771,  252,744  barrels;  in  1772,  284,827  barrels. 
Virginia  annually  for  some  years  preceding  the  Revolution  exported 
800,000  bushels  of  wheat. 

The  total  quantity  of  flour  exported  from  the  United  States  in 
1791  was  619,681  barrels,  besides  1,018,339  bushels  of  wheat ;  in  1800, 
653,052  barrels,  besides  26,853  bushels  of  wheat;  in  1810,  798,431 
barrels,  besides  325,924  bushels  of  wheat. 

From  1820-21  to  1839-40  exports  of  wheat  and  wheat  flour  aver- 
aged about  4,000,000  bushels  of  wheat  annually,  nearly  all  in  the 
form  of  flour,  the  total  exports  of  unground  wheat  for  the  whole 
19-year  period  being  less  than  1,000,000  bushels. 

In  a  country  so  extensive  as  the  United  States,  and  with 
transportation  facilities  so  imperfect  as  they  were  before  the  rail- 
road era,  it  is  inevitable  that  some  wheat  should  have  been  im- 
ported. In  ordinary  years  the  quantity  was  so  small  as  to  be  negli- 
gible. For  instance,  for  a  decade  prior  to  1835  the  amount  did  not 
reach  4,000  bushels  in  any  single  year.  In  that  year  we  imported 
nearly  a  quarter  of  a  million  bushels ;  in  1836,  more  than  half  a 
million,  and  in  1837,  3,921,259  bushels,  or  more  than  the  exports 
for  that  year,  which  were,  for  the  fiscal  year  1837-38,  in  wheat  and 
flour,  the  equivalent  of  a  httle  more  than  2,000,000  bushels  of  wheat. 

This  year  of  financial  disaster  was  the  only  year  since  1820, 
and  in  all  probability  the  only  year  since  the  Revolution,  in  which 
the  United  States  imported  as  much  wheat  as  it  exported,  and 
after  1838  imports  of  wheat  almost  ceased. 

Of  the  total  imports  in  1837,  279,347  bushels  came  from  Prussia, 
1,405,783  bushels  from  the  Hanse  towns,  453,036  bushels  from  Hol- 
land, 792,675  bushels  from  England,  317,170  bushels  from  British- 
American  colonies,  228,113  bushels  from  Italy  and  Malta,  196,000 
bushels  from  Trieste.  (Ex.  Doc.  1st  Session  28th  Congress, 
Doc.  110.) 


[1853]                            OF  THE  CITY  OF  CHICAGO  181 

The  following  table   shows  the   exports  of   flour,   wheat   and 
corn  from  1820-21  to  1853 : 

Wheat  Flour  Indian  Corn  Indian  Meal 

Years  Bushels  Barrels  Bushels  Barrels 

1820-21 25,821  1,056,119  607,277  131,669 

1821-22 4,418  827,865  509,098  148,228 

1822-23 4,272  756,702  749,034  141,501 

1823-24 20,373  996,792  779,297  152,723 

1824-25 17,990  813,906  869,644  187,285 

1825-26 45,166  857,820  505,381  158,652 

1826-27 22,182  868,492  978,664  131,041 

1827-28 8,906  860,809  704,902  174,639 

1828-29 4,007  837,385  897,656  173,775 

1829-30 45,289  1,227,434  444,107  145,301 

1830-31 408,910  1,806,529  571,312  207,604 

1831-32 88,304  864,919  451,230  146,710 

1832-33 32,221  955,768  487,174  146,678 

1833-34 36,948  835,352  303,449  149,609 

1834-35 47,762  779,396  755,781  166,782 

1835-36 2,062  505,400  124,791  140,917 

1836-37 17,303  318,719  151,276  159,435 

1837-38 6,291  448,161  172,321  171,843 

1838-39 96,325  923,151  162,306  165,672 

1839-40 1,720,860  1,897,501  574,279  206,063 

1840-41 868,585  1,515,817  535,727  232,284 

1841-42 817,958  1,283,602  600,308  209,199 

1842-43 311,685  841,474  672,608  174,354 

1843-44 558,917  1,438,574  825,282  249,882 

1844-45 389,716  1,195,230  840,184  269,030 

1845-46 1,613,795  2,289,476  1,826,068  298,790 

1846-47 4,399,951  4,382,496  16,326,050  948,060 

1847-48 2,034,704  2,119,393  5,817,634  582,339 

1848-49 1,527,534  2,108,013  13,257,309  405,169 

1849-50 608,661  1,385,448  6,595,092  259,442 

1850-51 1,026,725  2,202,325  3,426,811  203,622 

1851-52 2,694,541  2,799,339  2,627,075  181,105 

1852-53 3,890,141  2,920,918  2,274,909  212,118 


Indian  corn  was  exported  from  the  colonies  before  the  Revolu- 
tion, Virginia  alone  supplying  about  600,000  bushels  annually  for 
some  years  before  1775.  Small  quantities  were  shipped  from  South 
Carolina,  Georgia  and  North  Carolina.  In  1771,  Philadelphia 
shipped  259,441  bushels. 

After  the  Revolution,  exports  of  corn  increased,  and  in  1791, 
2,064,936  bushels  were  exported  (including  Indian  meal)  ;  in  1800, 
2,032,435  bushels  (including  meal),  and  in  1810,  1,140,996  bushels 
(including  meal). 


182  HISTORY  OF  THE  BOARD  OF  TRADE  [1853] 

Before  the  opening  of  the  Erie  Canal  in  1825,  all  the  surplus 
wheat  and  corn  was  produced  in  the  Atlantic  seaboard  states,  except 
a  small  quantity  which  found  its  way  down  the  Mississippi  and 
was  exported  from  New  Orleans.  Soon  after  the  opening  of  the 
Erie  Canal  the  surplus  of  Ohio,  and  later  of  Indiana,  was  shipped 
from  Toledo,  Sandusky  and  Cleveland,  the  state  of  Ohio  alone  pro- 
ducing in  1839  more  than  33,500,000  bushels  of  corn  and  more  than 
16,500,000  bushels  of  wheat.  The  time  had  now  come  for  Chicago 
to  wrest  from  these  Ohio  towns  their  leadership  as  shippers  of  food 
products  and  to  put  on  the  crown  she  has  never  relinquished. 

While  the  grain  business  of  the  city  as  a  whole  showed  less 
increase  in  1853  than  may  have  been  expected,  the  receipts  of 
wheat  were  largely  in  excess  of  the  previous  year.  The  following 
table  shows  the  receipts  of  wheat  and  the  avenues  by  which  it 
reached  the  city : 

Wheat,  1853 
Bushels 

Galena  &  Chicago  Railroad 901,366 

Canal 352,103 

Lake 62,031 

Eastern  railroads  15,081 

Teams   297,980 

Rock  Island  Railroad 44,115 

Illinois  Central  Railroad 14,789 

Total   1,687,465 

Receipts  of  flour  for  the  year  were  131,130  barrels,  against 
124,316  barrels  the  year  before.  City  mills  manufactured  about 
12,000  barrels  more  than  in  1852. 

Shipments  of  wheat  by  lake  were  1,206,163  bushels,  and  102,267 
bushels  were  shipped  east  by  rail,  most  of  it  to  towns  on  the 
Michigan  Central  Railroad. 

The  receipts  of  corn  for  1853,  and  the  sources  from  which 
they  came,  are  shown  in  the  following  table : 

Corn,  1853 
Bushels 

By  Illinois  and  Michigan  Canal 2,481,334 

By  Galena  &  Chicago  Union  Railroad 228,505 

By  teams   136,220 

By  Chicago  &  Rock  Island  Railroad 17,862 

By  Illinois   Central    3,595 

By  eastern  railroads   1,823 

Total   2,869,339 


[1853]  OF  THE  CITY  OF  CHICAGO  183 

The  shipments  of  corn  by  lake  were  2,729,552  bushels,  and  by- 
eastern  railroads  40,676  bushels.  Both  receipts  and  shipments 
show  a  slight  decrease  for  the  year. 

The  movement  of  oats  showed  a  falling  off  of  about  200,000 
bushels  in  receipts,  which  came  from  sources  indicated  in  the 
following  table: 

Oats,  1853 
Bushels 

By  canal    : 971,350 

By  Galena  &  Chicago  Union  Railroad 472,829 

By  teams   402,729 

By  Chicago  &  Rock  Island  Railroad 11,810 

By  Illinois  Central   16,779 

By  eastern  railroads 273 

Total   1,875,770 

The  shipment  of  oats  by  lake  amounted  to  1,633,842  bushels, 
and  by  eastern  railroads  114,169  bushels. 

The  number  of  hogs  packed  during  the  season  November,  1853, 
to  March,  1854,  was  52,849,  an  increase  of  about  4,000  head  over 
the  packing  of  the  previous  season,  and  their  average  weight  was 
249J/2  pounds.  Of  the  fifteen  packers  engaged  in  this  business,  the 
following  firms  each  packed  more  than  2,000  head,  viz. : 

Gurdon  S.  Hubbard 14,010 

R.  M.  Hough  &  Co 8,187 

Reynolds  &  Hayward 7,388 

Thomas  Dyer 4,93 1 

S.  S.  Carpenter 4,920 

Hugh  Maher   2,800 

George  Steel 2,650 

Hale  &  Clybourne 2,900 

This  was  a  creditable  showing,  but  Cincinnati  was  still  far  in 
the  lead  as  a  packing  point,  the  "Price  Current"  of  that  city,  in  a 
review  of  the  packing  season  of  1853-54,  estimating  the  number  of 
hogs  packed  in  "Porkopolis"  (a  sobriquet  for  Cincinnati)  as  431,000, 
out  of  a  total  at  all  western  points  of  more  than  2,500,000.  Accord- 
ing to  the  "Price  Current,"  there  were  55  packing  points  in  Ohio, 
62  in  Indiana,  54  in  Illinois,  19  in  Kentucky,  10  in  Tennessee,  10 
in  Iowa,  20  in  Missouri,  2  in  Wisconsin,  and  1  (Detroit)  in  Michi- 
gan, a  total  of  233  packing  points  in  the  nine  states  named. 

The  total  receipts  of  hogs  were  73,980,  of  which  the  Galena  & 
Chicago  Union  Railroad  brought  in  45,779  and  the  Chicago  &  Rock 


184  HISTORY  OF  THE  BOARD  OF  TRADE  [1853] 

Island  14,225  head.  Nearly  10,000  head  were  shipped  east  by  the 
Michigan  Central  and  the  Michigan  Southern  railroads. 

Some  falling  ofif  in  the  beef  packing  was  expected  on  account 
of  the  heavy  draft  upon  the  cattle  region  tributary  to  Chicago  for 
the  supply  of  California,  Oregon  and  Minnesota.  Nevertheless,  the 
business  of  1853  showed  a  slight  increase,  the  number  of  cattle 
packed  in  Chicago  being  25,435. 

No  line  of  business  showed  a  greater  percentage  of  growth 
than  the  lumber  trade.  Receipts  of  lumber  were  202,101,098  square 
feet,  against  147,816,232  square  feet  in  1852. 

The  Chicago  wheat  market  was  exceedingly  erratic  in  1853. 
Almost  bare  of  supplies  in  the  early  part  of  the  year,  and  stagnant 
for  reasons  already  given,  the  opening  range  of  70@90  cents  for 
winter  wheat  and  65@75  cents  for  spring  wheat,  according  to  qual- 
ity, covered  most  of  the  transactions  prior  to  the  middle  of  July, 
when  the  strength  in  foreign  markets  caused  a  moderate  advance 
of  about  10  cents  a  bushel  in  the  face  of  a  good  crop  outlook  in  the 
United  States.  This  advance  was  not  wholly  maintained,  but 
throughout  the  autumn  diplomatic  mutterings  which  preceded  and 
presaged  the  approaching  Crimean  War  kept  the  wheat  markets 
of  the  world  in  turmoil,  and  advances  and  declines  of  10@15  cents 
a  bushel  occurred  in  Chicago  more  than  once  as  the  news  from 
Europe  was  warlike  or  the  reverse. 

The  wheat  harvest  of  1853  in  France  and  England  was  deficient, 
the  Liverpool  "Courier"  estimating  the  shortage  of  the  two  coun- 
tries, as  compared  with  the  previous  year,  at  108,000,000  bushels. 
("Journal,"  September  10,  1853.)  This  deficit  would  have  assured 
moderately  high  prices  without  the  stimulus  derived  from  the  Cri- 
mean War  between  Russia  and  Turkey,  which  had  been  threaten- 
ing for  several  months,  and  which  began  late  in  the  fall  of  1853, 
and  in  which  England  and  France  joined  in  1854. 

The  following  table  shows  the  price  of  wheat  in  the  Chicago 
market  on  the  first  day  of  each  month  during  the  year  1853 : 

1853                                                            Spring  Winter 

January $0.70@0.76  $0.73@0.86 

February @  .65  .75@  .85 

March    60@  .70  .70@  .85 

April    55@  .65  .70@  .80 

May  60@  .66  .80@  .90 

June 66@  .79  .7Z@  .90 

July   66@  .75  .78@  .90 

August @  .82  .80@  .96 

September    65@  .82  .80@  .90 

October 94@1.00  1.00@1.13 

November 85@  .90  .95@1.05 

December 85@  .90  .95@1.00 


[1853]  OF  THE  CITY  OF  CHICAGO  185 

The  price  of  corn  and  oats  on  the  first  day  of  each  month 
during  the  year  is  shown  in  the  following  table : 

1853                                                             Corn  Oats 

January $0.39@0.55  $0.33@0.35 

February 38@  .41  .34@  .35 

March    40@  .45  .33@  .34 

April    36@  .40  .30@  .34 

May 40@  .46  .34@  .40 

June 45@  .50  .i7@  .40 

July   47@  .50  .30@  .32 

August    58@  .65  .34@  .37 

September 56@  .60  .29@  .32 

October 54@  .55  .26@  .27 

November 48@  .50  .26@  .28 

December 47@  .48  .27@  .28 

The  yield  of  the  coarse  grains  in  1853  was  above  an  average, 
and  they  were  not  influenced  in  price  by  the  war  excitement  to  the 
same  extent  as  wheat. 

The  packing  season  of  1852-53  was  not  a  successful  one  for 
the  western  packers,  because  they  paid  too  much  for  hogs.  They 
were  not  disposed  to  repeat  the  mistake  the  next  year,  and  little 
was  done  in  the  fall  of  1853  until  well  along  in  December,  when 
the  farmers  concluded  to  accept  $3.00@3.50,  live  weight.  Before 
the  close  of  the  year  even  lower  prices  were  reached. 

Beef  packers  paid  $2.50@3.25  live  weight,  or  $S.OO@5.50 
dressed,  for  cattle  in  October,  November  and  December,  the  months 
which  constituted  the  beef-packing  period.  The  average  market 
price  of  mess  beef  at  the  close  of  the  packing  season  was  $11.00@ 
12.00  per  barrel. 

Mess  pork  fluctuated  less  in  price  than  any  other  important 
article  of  produce,  the  extremes  for  the  year  being  $15.00@  16.00 
per  barrel. 

Sales  of  corn  and  oats  for  future  delivery,  mainly  "to  arrive" 
from  Canal  or  Illinois  River  points,  were  common,  and  that  sellers 
sometimes  sold  too  much  "short"  is  indicated  by  an  item  in  the 
"Journal"  of  May  13.  It  reads :  "High  price  of  corn  is  due  to 
scarcity  of  boats  on  the  canal,  rendering  parties  on  the  Illinois 
River  unable  to  send  forward  but  little  more  than  sufficient  to 
supply  contracts  previously  made  for  delivery  at  this  point.  In 
some  cases  even  doubts  are  entertained  of  the  ability  of  contracting 
parties  to  fill  engagements  against  the  time  stipulated  for,  and 
some  speculative  feeling  has  been  observable  in  consequence." 

Illinois  and  Michigan  Canal  freights  on  corn  at  this  time  were: 
7  cents  per  bushel  from  Beardstown  to  Chicago. 
6  cents  per  bushel  from  Peoria  or  Pekin  to  Chicago. 
4  cents  per  bushel  from  La  Salle  to  Chicago. 


186  HISTORY  OF  THE  BOARD  OF  TRADE  [1854] 

Charters  were  made  in  March  at  5jki@6  cents  per  bushel  on 
corn  to  Buffalo;  in  April  at  6j/@7  cents;  in  May  and  June  at  4@5 
cents;  in  July  at  3j/2@4  cents;  in  August,  lJ^@2i/2  cents;  in  Sep- 
tember, 3@9  cents ;  while  in  October  and  November  as  high  as  13 
cents  was  paid  on  corn  and  15  cents  on  wheat  to  Buffalo. 

Freights  on  the  Erie  Canal  were  16  cents  on  wheat  and  12J/2 
cents  on  corn  from  Buffalo  to  New  York  on  the  20th  of  May, 
24  cents  in  September  and  October. 

In  the  hope  of  securing  action  by  Congress  looking  to  the 
improvement  of  the  harbor,  the  Board  of  Trade  sent  Thomas  Hale 
and  Orrington  Lunt  to  Washington  to  urge  the  necessity  of 
immediate  relief,  but  without  avail. 

1854 

Chicago  became  a  great  city  because  it  was  located  at  the 
point  where  rail  and  water  transportation  meet,  and  upon  a  route 
which  offered  cheaper  freights  from  the  interior  to  the  seaboard 
than  could  be  afforded  elsewhere.  Its  selection  as  the  terminus 
of  the  canal  from  the  Illinois  River  to  Lake  Michigan  gave  it  an 
initial  advantage  over  Michigan  City,  Milwaukee  and  all  other 
would-be  rivals  on  the  lake,  which  the  construction  of  two  or  three 
short  railroads  made  permanent,  and  which  no  "cut-off"  such  as  the 
one  from  La  Porte,  or  any  other  point  on  the  Michigan  Central  or 
Michigan  Southern,  to  Joliet  or  elsewhere,  could  seriously  threaten. 
A  careful  study  of  the  reported  charters  during  the  six  years 
which  followed  the  opening  of  the  Illinois  and  Michigan  Canal 
leads  to  the  conclusion  that  the  average  freight  on  a  bushel  of  corn 
from  Chicago  to  Buffalo  during  those  years  was  not  far  from  7^ 
cents,  and  the  average  freight  from  Buffalo  to  New  York  on  the 
Erie  Canal,  about  135^  cents.  Elevating  and  other  charges  at 
Buffalo,  insurance,  interest,  etc.,  might  bring  the  total  average 
cost  from  Chicago  to  New  York  up  to  25  cents  a  bushel  on  corn, 
and  28  or  29  cents  per  bushel  on  wheat.  The  arrival  in  Chicago 
of  a  large  fleet  of  vessels  when  little  grain  was  in  store,  some- 
times depressed  freights  to  less  than  one-half  the  figure  which  is 
here  assumed  to  have  been  the  "average"  rate;  but  at  less  than 
3@3y2  cents  on  corn,  vessel  owners  usually  preferred  to  load  on 
their  own  account.  Few  sailing  vessels  then  in  the  lake  grain 
trade  carried  more  than  15,000  bushels  of  corn,  and  this  load  at 
3@33/2  cents  per  bushel  was  not  very  remunerative  to  the  vessel 
owner. 

Oswego  and  Rochester  were  at  this  time  the  great  milling 
centers  of  the  country,  the  former  producing  nearly  three-quarters 
of  a  million  barrels  yearly,  and  Rochester  almost  as  much.  Not- 
withstanding the  great  strides  Chicago  had  made  as  a  wheat  mart, 
it  was  still  a  small  factor  in  the  general  wheat  trade  of  the  country, 
less  than  a  fourth  of  the  receipts  of  wheat  at  Buffalo  in  1853  having 


[1854]  OF  THE  CITY  OF  CHICAGO  187  • 

been  shipped  from  the  western  metropolis.  On  the  other  hand,  a 
large  percentage  of  the  3,665,793  bushels  of  corn  received  at  Buffalo 
came  from  Chicago,  and  the  same  was  true  of  oats,  receipts  of 
which  at  Buffalo  amounted  to  1,480,655  bushels.  ("Democratic 
Press,"  February  6,  1854.) 

In  January,  1854,  the  Great  Western  Railway  of  Canada  was 
opened  from  Windsor  (opposite  Detroit)  to  Niagara  Falls,  giving 
another  all-rail  route  from  Chicago  to  the  East  via  the  Michigan 
Central  Railroad ;  and  on  the  22d  of  February  the  Chicago  &  Rock 
Island  road  was  opened  to  its  western  terminus,  giving  Chicago 
its  second  all-rail  line  (the  first  direct  line  under  one  management) 
to  the  Mississippi  River.  Trains  began  running  on  the  Illinois  & 
Wisconsin  Railroad  to  Deer  Grove,  thirty  miles  from  Chicago,  on 
the  10th  of  February,  1854.  This  road  afterwards  became  part  of 
the  Chicago  &  Northwestern  railway  system. 

About  the  middle  of  February,  all  available  grain  storage  room 
was  filled,  and  on  the  16th  of  March  a  statement  of  the  amount 
of  grain  in  store  in  Chicago  (668,097  bushels,  all  told)  includes 
22,000  bushels  of  wheat  and  corn  stored  in  the  brigs  "Walbridge" 
and  "Roscius."  The  largest  amount  in  any  one  house  was  94,000 
bushels,  which  was  probably  the  capacity  of  S.  B.  Pomeroy's 
elevator.  As  the  opening  of  navigation  approached,  conditions 
did  not  improve,  although  the  eastern  railroads  were  carrying  con- 
siderable quantities  of  spring  wheat  to  Michigan  mills,  perhaps 
to  be  made  into  Michigan  winter  wheat  flour.  Vessels  were  con- 
verted into  warehouses,  every  possible  inch  was  crowded  to  its 
utmost  capacity,  and  still  the  cry  was  "room."  ("Democratic  Press," 
April  5,  1854.)  Even  as  late  as  the  10th  of  June  the  Galena  & 
Chicago  Union  Railroad  declared  a  temporary  embargo  on  ship- 
ments to  Chicago  on  account  of  the  crowded  condition  of  the 
warehouses. 

In  a  manual  of  the  railways  of  the  United  States  at  this  time, 
Illinois  is  in  second  place  with  3,277  miles  built  or  building,  Ohio 
being  first  with  4,191  miles. 

A  convention  met  at  Detroit  on  the  1st  of  March,  1854,  to 
devise  a  plan  for  improvement  of  the  St.  Clair  flats.  After  organiz- 
ing and  electing  a  president  and  secretary,  and  after  the  appoint- 
ment of  committees,  it  adjourned  to  meet  in  Chicago  on  the  8th. 
The  Board  of  Trade  placed  its  rooms,  21  Dearborn  Street,  at  the 
disposal  of  the  convention.  The  discussion  covered  a  wide  range 
of  subjects,  the  proposed  American  canal  around  Niagara  Falls 
being  opposed  by  the  delegates  from  Buffalo,  while  the  committee 
on  improvement  of  the  St.  Clair  flats  was  not  ready  to  make  a  full 
report.     ("Democratic  Press,"  March  11,  1854.) 

The  Chicago  delegates  to  the  Marine  Convention  having  failed 
to  secure  an  endorsement  of  the  Niagara  ship  canal,  important 
action  was  taken  by  the  Board  of  Trade  at  a  meeting  held  on  the 


188  HISTORY  OF  THE  BOARD  OF  TRADE  [1854J 

11th  of  March.  Thomas  Richmond  proposed,  and  the  Board  unani- 
mously adopted,  a  resolution  favocing  the  project  and  requesting^ 
the  delegation  in  Congress  frorh  the  state  of  Illinois  to  support  it 
by  their  influence  and  votes. 

A  resolution  was  also  adopted,  without  dissent,  "that  a  commit- 
tee of  five  be  appointed  to  superintend  the  cleaning  out  of  the  har- 
bor," and  as  it  was  feared  the  fund  raised  for  the  purpose  might  be 
insufficient,  another  committee  was  appointed  to  urge  the  common 
council  to  make  an  "appropriation  for  the  purpose  of  clearing  away 
the  bar  at  the  mouth  of  the  harbor  and  keeping  the  same  dredged 
out  for  the  coming  year."  Committees  were  also  appointed  at  this 
meeting  to  examine  the  St.  Clair  flats  and  report  upon  the  best 
means  of  "removing  the  obstructions  they  offer  to  navigation." 
The  president  and  secretary  of  the  Board  were  requested  to  corre- 
spond with  the  proper  official  with  reference  to  the  improvement 
of  navigation  in  the  Illinois  River. 

Still  another  committee  was  appointed  to  procure  rooms  for 
the  ensuing  year.     ("Democratic  Press,"  March  14,  1854.) 

The  citizens  of  Chicago,  despairing  of  help  from  Congress, 
subscribed  a  thousand  dollars  for  the  improvement  of  the  harbor, 
with  the  understanding  that  the  money  was  to  be  expended  under 
the  direction  of  the  Board  of  Trade.  The  president  of  the  Board 
of  Trade  applied  to  the  War  Department  for  the  privilege  of  using 
the  Government  dredge,  which  was  lying  idle  in  the  Chicago  River, 
to  cut  a  channel  through  the  bar  at  the  mouth  of  the  harbor.  The 
War  Department  rejected  the  application,  and  a  joint  committee 
of  the  common  council  and  the  Board  of  Trade  thereupon  adopted 
the  hazardous  resolution  that  they  would  use  the  dredge  anyhow. 
They  did ;  but  before  they  had  removed  the  bar.  Lieutenant  Colonel 
Graham,  United  States  engineer  in  charge  of  the  harbor  work,  on 
orders  from  Washington,  politely  demanded  that  the  dredge  should 
be  again  placed  in  his  possession.  This  was  done  and  "the  incident 
was  closed."  Colonel  Graham,  however,  put  the  dredge  at  work 
and  early  in  August  a  channel  600  feet  wide  and  from  llJ/2  to  13 
feet  deep  was  found  by  representatives  of  the  Board  of  Trade  and 
the  common  council,  who  had  been  invited  to  inspect  the  work. 
This  was  sufficient  depth  of  water  for  the  vessels  then  navigating 
the  upper  lakes. 

The  Board  of  Trade  at  its  semi-annual  meeting  in  October 
adopted  a  vote  of  thanks  to  Colonel  Graham  for  his  effective  work 
upon  the  harbor. 

The  sixth  annual  meeting  of  the  Board  of  Trade  was  held 
April  3,  1854,  when  the  following  officers  were  elected : 

President,  George  A.  Gibbs,  who  received  17  votes  out  of  a 
total  of  25. 

Vice-President,  W.  D.  Houghteling. 

Secretary  and  Treasurer,  James  E.  Dalliba. 


11854]  OF  THE  CITY  OF  CHICAGO  189 

As  usual,  a  committee  was  appointed  to  procure  suitable  rooms 
for  the  Board.  The  meeting  then  adjourned  for  one  week,  and  at 
the  adjourned  meeting  it  was  resolved  to  print  the  constitution 
and  by-laws  in  pamphlet  form,  embracing  the  names  of  the  actual 
members  of  the  Board  and  the  newly  elected  officers. 

At  a  meeting  held  early  in  May  the  committee  on  rooms 
reported  that  they  had  secured  commodious  quarters  over  Puring- 
ton  &  Scranton's  store,  corner  of  Wells  and  South  Water  streets, 
at  an  annual  rental  of  $250.00,  and  the  Board  ratified  this  action. 
W.  D.  Wilson  was  allowed  the  use  of  the  rooms  as  compensation 
for  taking  care  of  them. 

Early  in  its  history  as  a  grain  market,  Chicago  discarded  the 
antiquated  method  of  buying  and  selling  grain  by  the  measured 
bushel,  and  adopted  the  system  of  buying  and  selling  by  weight. 
The  dispute  whether  56  or  60  pounds  should  constitute  a  bushel 
of  shelled  corn  still  continued,  but  the  standard  bushel  of  wheat 
was  60  pounds  and  of  oats,  32  pounds. 

It  is  believed  that  all  the  Lake  ports  followed  the  lead  of 
Chicago  in  this  reform,  but  the  merchants  in  New  York  adhered 
to  the  old  system,  and  there  was  much  wrangling  and  dissatisfaction 
among  shippers,  in  consequence. 

The  Buffalo  grain  merchants,  compelled  to  buy  in  the  West  by 
weight,  and  to  sell  in  New  York  by  measure,  felt  the  inconvenience 
keenly,  and  in  June,  1854,  the  Buffalo  Board  of  Trade  adopted  the 
report  of  a  committee  of  that  organization  which  was  (in  part)  as 
follows : 

"Whereas,  it  is  the  custom  in  this  city,  and  also  with  dealers 
at  all  western  ports  to  buy,  sell  and  ship  all  kinds  of  grain  by  weight, 
and  whereas  it  is  the  custom  in  the  city  of  New  York  to  sell  and 
deliver  grain  by  measuring  in  sealed  half-bushel  measures,  it  is 
therefore 

"Resolved,  That  this  Board  of  Trade  strongly  disapprove  of 
the  practice  of  measuring  grain  as  now  existing  in  the  city  of 
New  York,  and  view  it  as  detrimental  to  the  interest  of  produce 
dealers  generally,  and  particularly  tg^  those  making  shipments 
direct  to  that  market,  occasioning  thereby  unnecessary  delays  in 
unloading  boats,  and  vexatious  disputes  and  losses  to  shippers 
and  owners  of  grain. 

"Resolved,  That  this  Board  view  the  antiquated  custom  of 
measuring  grain  as  practiced  in  the  city  of  New  York,  as  an 
incorrect  and  illegal  method  of  ascertaining  the  number  of 
bushels,  and  the  practice  ought  to  be  abolished  and  an  uniform 
system    of   selling    and    delivering   by    weight,    adopted. 

"Resolved,  That  this  Board  respectfully  recommend  to 
shippers  here  and  elsewhere  that  they  instruct  their  consignees 
and  agents  in  the  city  of  New  York  to  sell  and  deliver  grain  by 
weight  according  to  the  statute  law  of  the  State  regulating  the 


190  HISTORY  OF  THE  BOARD  OF  TRADE  [18541 

number  of  pounds  to  the  bushel,  and  furthermore  that  shippers 
be  requested  to  note  the  instructions  in  this  regard  on  their  Bills 
of  Lading." 

Another  resolution  called  upon  the  President  of  the  Corn 
Exchange  in  New  York,  and  the  President  of  the  Boards  of  Trade 
at  Albany  and  Oswego,  to  "co-operate  in  establishing  a  uniform 
system  of  delivering  all  kinds  of  grain  by  weight." 

Probably  this  action  of  the  Buffalo  Board  of  Trade  was 
inspired  by  the  shippers  of  Chicago  and  other  western  ports,  as 
it  has  been  proposed  by  some  of  them  that  Buflfalo  should  lead 
in    this   reform.      (Democratic    Press,   June    17,    1854.) 

A  little  later  in  the  year  the  Board  of  Trade  of  the  city  of 
Chicago  adopted  the  following: 

"Resolved,  That  the  Board  of  Trade  concur  most  fully  in  the 
preamble  and  resolutions  passed  by  the  Board  of  Trade  of  Buffalo, 
touching  the  old  and  uncertain  mode  of  testing  the  quantity  of 
grain  by  the  use  of  the  half-bushel  as  practiced  in  the  Atlantic 
cities,  and  do  most  earnestly  request  the  Board  of  Trade  in  those 
cities  to  substitute  the  scales  or  balance  for  the  half-bushel,  and 
that  this  Board  of  Trade  request  the  Boards  of  Trade  of  Milwau- 
kee, Detroit,  Toledo,  Cleveland  and  all  other  shipping  ports  to 
co-operate  with  us  in  the  effort  to  accomplish  this  desirable 
object." 

Whether  the  Chicago  Board  was  instrumental  in  bringing 
about  the  action  of  the  Buffalo  Board  of  Trade  above  referred  to, 
or  not,  its  influence  was  exerted  unreservedly  in  favor  of  the  needed 
change  in  the  custom  of  handling  grain  at  the  seaboard,  and 
ultimately,  western  methods  were  adopted  in  all  the  eastern  cities. 
To  this  reform,  without  which  the  enormous  volume  of  grain 
shipped  from  Chicago  and  other  western  ports  to  the  seaboard 
in  after  years,  could  not  have  been  handled  there,  may  be  traced 
all  the  improved  methods  of  inspecting,  grading,  storing  and 
transporting  grain  in  bulk,  which  have  revolutionized  the  trade  of 
the  world.  None  of  these  would  have  been  possible  under  the  old 
custom  of  measurement  by  the  half-bushel. 

The  portion  of  the  Chicago  and  Mississippi  railroad  between 
Bloomington  and  Chicago  was  finished,  and  on  the  31st  of  July 
trains  began  running  over  the  line  to  Alton  direct,  instead  of 
via  La  Salle  and  the  Illinois  Central  main  line  to  Bloomington  as 
hitherto. 

During  the  summer,  J.  S.  Root  rented  a  new  elevator  with  a 
capacity  of  300,000  bushels,  which  had  been  built  by  M.  O.  Walker, 
but  the  want  of  storage  room  was  still  keenly  felt,  and  the  burning 
of  Steel's  elevator  on  the  20th  of  August,  added  to  the  difficulty 
of  caring  for  the  produce  which  was  pouring  into_  Chicago.  The 
Democratic  Press  of  September  13th  says,  "The  piles  of  grain  now 
lying  uncovered  in  our  streets,  the  choked  and  crowded  thorough- 


[1854]  OF  THE  CITY  OF  CHICAGO  191 

fares,  the  overloaded  teams,  the  bursting  bags,  *  *  *  all  testify 
to  a  wide-felt  want  of  room.  Consignments  from  the  country  whose 
owners  have  been  for  weeks  anxiously  awaiting  opportunities  for 
forwarding,  are  at  this  moment  actually  detained  for  want  of  the 
necessary  facilities  for  transportation.  We  want  more  warehouses, 
*  *  *  we  want  more  banks  and  more  capital.  We  want  more 
cars  and  locomotives,"  etc.,  etc. 

A  little  later  in  the  month  a  Chicago  correspondent  of  the  New 
York  Journal  of  Commerce  (Democratic  Press,  September  23rd), 
says,  "The  warehouses  and  mills  and  cars  are  full  of  grain,  and 
it  can't  be  got  rid  of  fast  enough  to  make  room  for  what  is  pressing 
to  market.  Corn  on  the  Illinois  River  is  offered  at  a  wide  margin 
for  profit  because  there  are  not  facilities  to  ship  it.  The  Rock 
Island,  the  Chicago  and  Galena,  and  the  Chicago  &  Mississippi 
Railroad,  can't  begin  to  carry  the  freight  offered." 

Thirty-six  members  were  present  at  the  semi-annual  meeting 
of  the  Board  of  Trade,  October  2nd,  and  twenty  new  members  were 
admitted. 

A  favorite  idea  among  the  early  merchants  of  Chicago  was 
direct  trade  with  European  ports  through  the  Lakes  and  the  St. 
Lawrence  River  without  breaking  bulk,  and  when  in  the  autumn  of 
1854  the  Reciprocity  Treaty  with  Canada  was  negotiated  and 
navigation  of  the  St.  Lawrence  became  free  to  American  vessels, 
this  project  seemed  near  realization.  In  the  latter  part  of  Novem- 
ber, 1854,  the  following  notice  was  posted  conspicuously  in  the 
Board  of  Trade  rooms : 

"TO    SHIP    OWNERS. 

"Wanted  1  vessel  for  Liverpool, 
"Wanted  1  vessel  for  Glasgow, 
"Wanted   1  vessel  for  Cork  for  orders. 

"These  ships  must  be  first-class,  and  can  be  profitably  employed 
in  the  coasting  trade  between  England  and  Ireland,  and  English 
ports  during  the  winter  months,  taking  out  passengers  to  Quebec 
in  the  spring,  should  they  not  be  able  to  get  further  than  Quebec 
at  a  proportionate  rate  for  Quebec. 

"Apply  to 

"Wm.   Kernaghan, 

"188  South  Water  St." 

In  a  letter  to  the  Democratic  Press  whose  editor  had  ques- 
tioned the  good  faith  of  the  advertisement,  the  advertiser  makes 
the  interesting  statement  that  the  lake  vessels  were  as  large  and 
heavy  as  those  trading  between  Great  Britain  and  the  Mediter- 
ranean, Black,  and  Baltic  Seas,  "ships  over  250  tons  not  being 
great    favorites    with     corn    merchants    or    corn     underwriters." 


192  HISTORY  OF  THE  BOARD  OF  TRADE  [1854] 

During  the  autumn  the  Board  of  Trade  fixed  11:30  to  12:30 
as  the  hour  of  the  daily  meeting. 

On  the  30th  of  October  the  G.  &  C.  U.  R.  R.  began  running 
trains  to  Galena,  giving  Chicago  a  third  connection  with  the  Missis- 
sippi River  and  making  it  the  Lake  shipping  point  for  the  grain 
of  the  Upper  Mississippi  Valley.  About  the  same  time  Peoria 
was  added  to  the  list  of  towns  tributary  to  Chicago,  by  the  com- 
pletion of  the  Peoria  and  Bureau  Valley  Railroad  and  its  junction 
with  the  C.  &  R.  I.  R.  R. 

Early  in  December  the  Central  Military  Tract  Railroad  was 
finished  from  its  junction  with  the  Chicago  and  Aurora  at  Mendota, 
to  Galesburg,  adding  the  rich  country  along  these  lines  (which 
later  became  the  Chicago,  Burlington  &  Quincy  R.  R.)  to  Chicago 
territory,  and  before  the  year  closed  the  main  line  of  the  Illinois 
Central  was  completed  to  Cairo,  giving  Chicago  a  fourth  railroad 
outlet  (via  La  Salle)  and  the  main  line  of  the  Illinois  Central  to 
the  Mississippi  River. 

In  its  Annual  Review  of  the  Commerce  of  Chicago  for  1854, 
the  Democratic  Press  (January  19,  1855)  gives  a  list  of  seventeen 
railroads  with  a  completed  mileage  of  2,436j4  miles,  all  of  which 
had  rail  connection  with  Chicago  at  the  close  of  the  year  1854, 
and  over  which  nearly  one  hundred  fully  loaded  trains  arrived  in 
Chicago  and  departed  therefrom  daily. 

The  Lake  tonnage  of  the  Chicago  District  had  increased  during 
the  year  from  29,306+  tons  to  44,295+  tons,  a  gain  of  more  than 
50  per  cent.  The  total  tonnage  of  the  Lakes  at  the  close  of  the 
year  was  237,820  tons,  valued  at  $10,185,000.  The  population  of 
the  city  had  increased  about  25  per  cent,  and  notwithstanding  the 
very  late  opening  of  navigation,  insufficient  storage  facilities  for 
grain,  the  obstructions  to  commerce  at  the  mouth  of  the  harbor,  in 
the  Illinois  River,  and  the  St.  Clair  flats,  several  breaks  in  the  Illinois 
and  Michigan  canals,  the  ruinous  drouth  of  the  late  summer  and 
fall,  and  the  bank  panic,  the  growth  of  trade  in  nearly  all  depart- 
ments of  business  was  amazing.  It  reminded  the  editor  of  the 
Press,  "of  the  figure  of  a  young  and  beautiful  damsel,  whose  round- 
ing form  and  budding  proportions  are  fast  bursting  from  the  lim- 
ited and  straining  vestments  which  sufficed  her  girlhood,  and 
demanding   a   costume   of    more    flowing    dimensions   and   costly 

texture." 

Sales  for  future  delivery  were  increasingly  frequent  m  1854, 
stimulated  by  the  Crimean  War,  and  it  is  evident  that  speculation 
■was  not  confined  to  the  Chicago  grain  market.  New  Orleans  papers 
of  the  13th  of  January  report  a  contract  for  150,000  bushels  corn 
deliverable  in  the  following  March  and  April.  The  "Democratic 
Press"  of  Chicago,  January  31st,  says,  "There  is  a  strong  disposi- 
tion to  operate  for  future  delivery  here  and  elsewhere,  on  the  part 
of  buyers,  but  holders  in  store  are  extremely  sanguine  and  quiet." 


[18S4]  OF  THE  CITY  OF  CHICAGO  193 

On  the  New  York  Exchange  there  was  considerable  speculation  in 
flour,  and  the  New  York  Times  of  March  1st  speaks  of  forced 
purchases  of  flour  to  fill  contracts  maturing  on  the  last  day  of 
February.  In  the  weekly  review  of  the  grain  market  on  the  12th 
of  March,  the  Democratic  Press,  speaking  of  the  arrivals  of  corn 
"in  the  last  three  days"  which  amounted  to  70,000  bushels,  says 
"by  far  the  greater  proportion  is  for  shipment  on  contracts  already 
made." 

The  St.  Louis  Evening  News  had  the  following,  which  was 
reprinted  in  the  Chicago  Journal  of  March  29,  1854 :  "Wheat 
contracts,  flour  contracts,  and  purchases  of  corn,  weeks  and  months 
since,  during  the  inflation,  are  beginning  to  mature  and  some  to 
fall  through,  as  they  usually  do  when  there  is  a  sudden  depression 
or  inflation  in  prices.  *  *  *  \Yg  have  seen  during  the  past  few 
weeks  heavy  arrivals  of  flour,  grain,  provisions,  etc.,  which  were 
bought  during  high  prices,  received  and  paid  for  cheerfully. 
*  *  *  The  truth  is  it  requires  considerable  moral  honesty,  and 
a  fair  share  of  mercantile  integrity,  to  receive  and  pay  for  large 
purchases  of  grain  which  have  declined  from  25  to  35  cents  per 
bushel,  and  flour  which  has  slipped  down  $1.00  to  $1.50  per  barrel, 
but  nevertheless,  it  is  done,  we  may  say  daily  and  hourly  in  this  city." 
The  "Journal"  of  April  21st  says  that  "the  purchaser  of  100,- 
000  bushels  of  corn  a  short  time  since  at  50  cents  contracted  to  be 
delivered  on  board  in  July  has  realized  a  cool  $3,000.00  by  a  re-sale 
of  one-half  of  the  same  to  parties  in  New  York." 

So  many  instances  of  purchases  for  future  delivery  are  cited 
in  the  market  reports  of  the  newspapers  during  the  first  few  years 
of  the  Board's  existence  that  any  one  who  consults  these  files  will 
be  convinced  of  the  magnitude  of  the  trade.  There  were  few  pro- 
fessional speculators  in  Chicago  then ;  perhaps  none.  But  every 
grain  merchant  was  ready  "to  take  a  chance,"  and  opinions  about 
future  values  differed  then  as  they  do  today.  The  trade  in  futures 
began  in  a  perfectly  natural  way.  The  storage  capacity  of  Chicago 
was  limited.  It  frequently  happened  that  a  northeast  wind  brought 
in  a  large  fleet  of  vessels  when  there  was  little  grain  in  Chicago, 
but  plenty  of  corn  and  oats  in  storehouses  along  the  line  of  the 
Canal  or  Illinois  River,  and  in  later  years  along  the  railroads.  Under 
these  circumstances  it  was  a  convenience  to  the  vessel  owner,  and 
to  the  Chicago  grain  merchant  as  well,  if  some  holder  of  grain  in  the 
country,  or  some  Chicago  agent  of  such  country  owner,  would  agree 
to  deliver  it  in  Chicago  within  a  specified  time,  i.  e.,  "to  arrive  in 
5  days,"  or  "to  arrive  in  10  days."  Sometimes  the  local  market 
was  unduly  stimulated  by  a  demand  to  complete  cargoes  of  vessels 
under  charter,  and  country  holders  who  could  not  ship  their  grain 
in  time  to  sell  on  such  a  "bulge"  might  be  glad  to  accept  something 
less  for  shipment  the  next  week,  or  the  next  month. 

The  following  tables  taken  from  the  Annual   Review   of  the 


194 


HISTORY  OF  THE  BOARD  OF  TRADE 


[18541 


Commerce  of  Chicago,  for  1854,  published  by  the  Democratic  Press, 
January  19,  1855,  show  the  increase  in  the  grain  and  provision  trade 
in  the  year  1854,  when  Chicago  began  to  come  into  its  own.  There 
are  several  inaccuracies  in  them,  errors  in  addition,  etc.,  but  the  fig- 
ures are  given  here  as  they  originally  appeared. 


Receipts  of  Barrels  of  Flour 

1853. 

By  Lake 2,265 

"     Canal   7,223 

"     Galena  R.  R 30,702 

"     Michigan  Southern  R.  R 

"     Michigan  Central  R.  R 7,411 

"     Rock  Island  R.  R 696 

"     C.  &  Miss.  R.  R 

Made  in  City 82,833 


1854. 

5,158 

17,623 

62,915 

963 

2,036 
68,751 

1,120 
66,009 


Total   131,130    224,575 


Shipments  of  Barrels  of  Flour 

1853. 

By  Lake 70,984 

Canal   1,107 

Galena  R.  R 445 

Michigan  Southern  R.  R 


Michigan  Central  R.  R 

C.  &R.  I.R.  R 

111.  Central  R.  R 

111.  &  Wis.  R.  R 

C.  &  Miss.  R.  R 

City  consumption  and  balance  on  hand. 


666 


988 


56,940 


1854. 

58,573 

520 

3,394 

27,365 

15,476 

457 

1,736 

96 

10 

116,948 


Total   131,130  224,575 

Receipts  of  Wheat  in  Bushels 

1853.  1854. 

By  Lake    62,031  12,279 

Canal  352,103  1,066,194 

Galena   R.   R 901,366  1,391,163 

Michigan  Southern  R.  R 3,835 

Michigan  Central  R.  R 15,081  4,360 

C.  &  R.  I.  R.  R 44,115  293,270 

111.  Central  R.  R 14,789  30,352 

111.  &  Wis.  R.  R 36,123 

C.  &Miss.  R.  R 1,379 

Teams   297,980  200,000 


Total   1,687,465     3,038,955 


[1854]  OF  THE  CITY  OF  CHICAGO  195 

Shipments  of  Wheat  in  Bushels 

1853.  1854. 

By  Lake 1,206,163  1,650,489 

"     Canal  1.618  863 

"     Galena  R.  R 3,358 

"     Michigan  Southern  R.  R 125,127 

"     Michigan  Central  R.  R 102,267  325,976 

"     C.  &  R.  I.  R.  R 248 

"     111.  Central  R.  R ,44 

"     C.  &  Miss.  R.  R 620 

Ground  by  Chicago  Mills 372,748  330,000 

Used   by    Distillers 3,000        

Shipped,  consumed,  on  hand  and  unac- 
counted for 402,230 

Total   1,685,796  3,038,955 

The  error  of  200,000  bushels  (in  addition)  probably  means  that 
the  Lake  shipments  should  be  increased  by  that  amount,  which 

would  make  the  total  shipments  of  wheat  for  the  year  2,306,725. 
Indeed,  it  is  probable  that   some  of  the  item   of  402,230  bushels 

"unaccounted  for,  on  hand,  etc."  went  out  by  Lake,  and  that  total 
shipments  for  the  year  approximated  2,500,000  bushels. 

Receipts  of  Com  for  Two  Years 

1853.  1854. 

By  Lake 1,808 

"     Canal    2,481,334  4,396,995 

"     Galena  R.R 228,505  2,038,743 

"     Michigan  Southern  R.  R 

"     Michigan  Central  R.  R 1,823  328 

"     C.  &  R.  I.  R.  R 17,862  564,757 

"     111.  Central   R.  R 3,595  229,566 

"     111.  &  Wis.  R.R 56,574 

"     C.&  Miss.  R.R 1,982 

"     Teams   136,220  200.000 

Total   2,869,339  7,490,753 

Shipments  of  Corn  for  Two  Years 

1853.  1854. 

By  Lake 2,739,552  6,626,054 

"     Canal  1 ,725 

"     Galena  R.  R 13,305 

"     M.  S.  R.  R 12,812 

"     M.  C.  R.  R 40,676  184,003 

Ground  at  City  Mills 18,500 

Used  by  Distillers 81,000  100,000 

On  hand,  consumed  &  unaccounted  for       8,111  534,354 

Total   2,869,339  7,490,753 


196 


HISTORY  OF  THE  BOARD  OF  TRADE 


[1854] 


Receipts  of  Oats  for  Two  Years 

1853. 

By  Canal    971,350 

"     Galena   R.    R 472,829 

"    Teams  402,729 

"     C.  &  R.  I.  R.  R 11,810 

"     III.  Central  R.  R 16,779 

"     Eastern   Railroads 273 

"     111.  &  Wis.  R.  R 

"     C.  &Miss.  R.  R 

"     Lake    


1854. 

1,566,330 

1,772,659 

400,000 

259,371 

118,012 


77,792 

155 

66 


Total   1,875,770    4,194,385 

Shipments  of  Oats  for  Two  Years 


1853. 

By  Lake    1,633,842 

"     Canal  483 

"     M.  S.  R.  R 

"     M.  C.  R.  R 114,169 

"     111.  Central  R.  R 

Consumed,  on  hand  &  unaccounted  for    127,276 


1854. 

2,959,715 

1,003 

39,733 

229,469 

67 

964,398 


Total   1,875,770    4,194,385 

Receipts  of  Rye  for  Two  Years 


1853. 

By  Lake    22 

"  Canal 3,948 

"  Galena  R.  R 76,676 

"  C.  &R.  I.  R.  R 517 

"  111.  Central  R.  R 635 

"  III.  &  Wis.  R.  R 

"  Te;ams    4,364 


Total   86,162 

Shipments  of  Rye  for  Two  Years 


By  Lake  

"     Canal    

"     M.  C.  R.  R 

"     C.  &  R.  I.  R.  R. 
Used    by    Distillers. 


1854. 

5,129 

69,683 

5,751 

432 

696 

4,000 

85,691 


1853. 

1854. 

81,594 

39,175 

1,380 

568 

576 

22 

4,000 

44,538 

Total   86,162 


85,691 


[1854]  OF  THE  CITY  OF  CHICAGO  19? 

Receipts  of  Barley  for  Two  Years 

1853.  1854. 

By  Lake    1,576  26,103 

"     Canal  25,610  641 

"     Galena  R.  R 135,429  143,340 

"     M.  S.  R.  R 203 

"     M.  C.  R.  R 219 

"     C.  &  R.  I.  R.  R 972  958 

"     111.  Central  R.  R 94 

"     111.  &  Wis.  R.  R 206 

"    Teams  28,800  30,000 

Total   192,387  201,764 

Shipments  of  Barley  for  Two  Years 

1853.  1854. 

By  Lake 79,689  33,683 

"     Canal 51  53,711 

"     M.  S.  R.  R 9,913 

"    M.  C.  R.  R 40,527  39,586 

"     C.  &R.  I.  R.  R 1,473 

"     C.  &  Miss.  R.  R 10,046 

Used  by  Brewers 72,120  53,352 

Total   192,387       201,764 

The  following  shipments  of  grain  from  Chicago  in  1854  were, 
as  follows,  according  to  the  Annual  Review  from  which  the  fore- 
going tables  are  tftken : 

Bushels. 

Wheat  2,106,725 

Corn 6,837,899 

Oats 3,229,987 

Rye    41,153 

Barley   148,421 

Flour  (wheat) 107,627  barrels  =     538,135 

Total    12,902,320 

These  figures  entitled  Chicago  merchants  to  claim  for  it  the 
distinction  of  being  the  greatest  primary  grain  market  in  the  world, 
basing  their  claim  upon  the  following  table  of  exports  from  the 
great  shipping  ports  of  the  Old  World,  as  well  as  those  in  the  United 

States : 

Odessa   7,040,000 

Galatz,  Braila   8,320,000 

Dantzig    4,408,000 


198  HISTORY  OF  THE  BOARD  OF  TRADE  [1854] 

St.   Petersburg    7,200,000 

Archangel    9,528,000 

Riga 4,000,000 

New  York 9,430,325 

St.  Louis 5,081,468 

Milwaukee   3,787,161 

(Toledo,   with   shipments   of 6,608,934 

should  have  been  included  in  this  list.) 

The  beef  packing  of  the  year  1854  was  conducted  by  G.  S. 
Hubbard  &  Co.,  R.  M.  &  O.  S.  Hough,  Cragin  &  Co.,  Reynolds  & 
Haywood,  Andrew  Brown  &  Co.,  B.  Carpenter,  Tobey  &  Booth, 
F.  L.  Kent. 

The  total  number  of  cattle  packed  was  23,691 ;  and  10,557  head 
were  shipped  to  eastern  markets  over  the  M.  S.  R.  R.  and  the  M.  C. 
R.  R.  The  total  shipments  are  said  by  Colbert  (p.  59)  to  have  been 
11,221  head.    The  value  of  the  beef  packed  in  1854  was  $865,773.11. 

Packers  paid  $3.00@$3.50  live  weight  for  most  of  the  cattle 
slaughtered  during  the  beef-packing  season  in  October  and 
November. 

The  receipts  of  hogs  during  the  year  1854-5  ware  138,515 
(Democratic  Press,  March  24,  1855),  of  which  more  than  half 
(74,379)  had  been  slaughtered  in  the  country  and  were  known  as 
"dressed  hogs." 

The  number  of  hogs  packed  in  Chicago  in  the  season  1854-5 
was  73,694,  and  the  number  shipped,  54,156. 

Prices  paid  for  hogs  by  packers  in  1854  were  very  much  less 
than  in  the  previous  year,  the  season  opening  November  1st  at 
$3.00@$3.50  for  dressed  hogs  and  showing  little  change  prior  to 
January  1st,  1855. 

Lumber 

The  receipts  of  lumber  in  1854  amounted  to  228,336,783  sq.  ft., 
and  the  shipments  to  133,131,872  sq.  ft. 

The  tables  illustrate  so  fully  the  marvelous  growth  of  the 
city's  grain  and  provision  trade  that  little  remains  to  be  said. 
Receipts  of  flour  and  wheat  were  practically  double  those  of  the 
preceding  year ;  receipts  of  corn  two  and  a  half  times  as  great ;  of 
oats  the  percentage  of  increase  was  almost  as  much. 

A  slight  falling  off  in  the  movement  of  cattle  was  more  than 
made  up  by  an  increase  of  almost  100  per  cent  in  the  number  of 
hogs  received.  Although  the  number  of  hogs  packed  in  Chicago 
did  not  increase  in  the  same  proportion,  it  showed  a  gain  of  about 
50  per  cent. 

The  importance  of  a  railroad  line  to  the  Pacific  Ocean  had  been 
recognized  since  the  discovery  of  gold  in  California  in  1848  started 
a  stream  of  emigrants  toward  that  distant  land,  of  such  propor- 


[1854]  OF  THE  CITY  OF  CHICAGO  199 

tions  that  in  four  years  the  State  had  a  population  of  more  than  a 
quarter  of  a  million  people.  Unfortunately  the  repeal  of  the  Mis- 
souri Compromise  in  1854  aroused  sectional  feeling  between  the 
North  and  the  South  to  such  an  extent  that  no  agreement  could 
be  reached  as  to  the  route  which  should  be  followed.  New  Orleans, 
Natchez  and  Memphis  were  points  favored  by  the  South  as  eastern 
terminals,   while   St.    Louis   pressed   its   claims. 

Meanwhile,  Jefferson  Davis,  Secretary  of  War,  was  obstructing 
to  the  best  of  his  ability,  the  construction  of  the  railroad  bridge 
across  the  Mississippi  River  which  the  Chicago  and  Rock  Island 
Company  had  nearly  completed,  and  which  would  connect  their 
line  in  Illinois  with  an  Iowa  line  already  building  towards  Council 
Bluffs. 

Two  new  elevators  with  a  capacity  of  300,000  and  500,000 
bushels  respectively  were  begun  in  1854,  besides  the  Root  elevator 
already  mentioned,  but  neither  of  them  was  finished  until  the 
following  year,  and  the  storage  capacity  of  the  city  did  not  exceed 
750,000  bushels  at  the  close  of  the  year  1854,  or  barely  150,000  more 
than  it  was  in  the  winter  of  1848-49. 

Transportation 

High  freights  were  the  rule  in  the  early  part  of  the  year, 
although  in  January  a  charter  was  made  for  the  season  at  6  cents 
per  bushel  on  corn  from  Chicago  to  Buft'alo.  In  February  charters 
were  made  at  123/^  and  13  cents  on  wheat  to  Buffalo,  probably 
including  storage  till  opening  of  navigation,  and 

In  March  I33/2  cents  was  paid  on  corn  to  Buffalo. 

In  March   15  cents  was  paid'  on  wheat  to  Buffalo. 

In  March  22  cents  was  paid  on  wheat  to  Oswego. 

In  April  13@14  cents  was  paid  on  corn  to  Buft'alo. 

In  May  and  June  10@11  cents  was  paid  on  corn  to  Buffalo. 

In  July  4@9  cents  was  paid  on  corn  to  Buffalo. 

In  August  4@5j/@6  cents  was  paid  on  corn  to  Buffalo. 

In   September  7@9  cents  was  paid  on   corn  to  Buffalo. 

In  October  8@12  cents  was  paid  on  corn  to  Buffalo. 

In  November  11@17  cents  was  paid  on  corn  to  Buffalo. 

Higher  rates  were  paid  to  steamers.  On  the  29th  of  November 
a  charter  (steam)  is  reported  at  21  cents  on  corn  to  Buffalo. 

For  some  reason  not  now  apparent,  rates  on  the  Erie  Canal  were 
not  proportionately  high.  The  earliest  freights  quoted  were  14 
cents  on  corn  from  Buffalo  to  New  York,  on  the  1st  of  May.  Other 
quotations  were,  as  follows : 

Freight  on  Erie  Canal,  Buffalo  to  New  York 

May  5,  15c;  May  19,  12c;  June  29,  12c;  July  8,  12c;  Sept.  28, 
12@12>^c;  Oct.  4,  12>^@13c;  Oct.  17,  12c;  Oct.  20-21,  12>4@13c; 
Nov.  2,  16c;  Nov.  8,  16>4@17c;  Nov.  9,  15c;  Nov.  21,  16@17c. 


200  HISTORY  OF  THE  BOARD  OF  TRADE  [1854] 

Lake  freights  from  Chicago  to  Oswego  were  usually  3  to  5 
cents  per  bushel  above  the  rate  to  Buffalo,  although  a  greater 
difference  was  sometimes  paid  when  rates  were  very  high. 

Railroad  rates  in  the  spring  of  1854  on  third  class  freight, 
which  included  grain  in  bags,  salted  beef  and  pork  in  casks,  etc., 
were  $1.02  per  hundred  pounds.  Some  flour  was  moving  from 
St.  Louis  to  New  York  via  Wheeling  and  Baltimore  at  this  time, 
at  $1.65  per  barrel,  which  was  said  to  be  40  cents  per  barrel  under 
the  rate  from  St.  Louis  to  New  York  via  New  Orleans.  If  lake 
freights  had  not  been  abnormally  high  this  flour  would  have  been 
shipped  via  Chicago. 

A  severe  drought  in  the  summer  and  autumn  of  1854  was  felt 
throughout  the  Ohio  Valley,  Kentucky,  Tennessee,  the  southern 
and  central  parts  of  Indiana  and  Illinois,  and  in  Missouri.  Pitts- 
burgh papers  pronounced  it  the  worst  drought  ever  known  there. 
Estimates  of  the  damage  to  the  corn  crop  of  the  West  ranged 
from  25  to  50  per  cent,  but  increased  acreage  partially  compensated 
for  the  diminished  yield  per  acre.  The  wheat  crop  was  an  average 
one ;  the  crop  of  oats  somewhat  below  normal,  in  yield,  at  least. 

Price  fluctuations  were  frequent  and  violent.  The  threatened 
participation  of  France  and  England  in  the  Crimean  War  as  the 
allies  of  Turkey,  and  the  postponement  of  hostilities  from  time  to 
time,  with  rumors  of  a  peaceful  settlement  of  the  difficulties,  made 
the  Chicago  grain  market  erratic  in  the  extreme,  and  advances  and 
declines  of  10@15  cents  in  wheat  within  a  few  days  were  frequent. 

The  corn  market  sympathized  only  partially  in  these  wild  fluc- 
tuations, but  exhibited  independent  strength  in  the  autumn  as  soon 
as  the  damage  to  the  growing  crop  became  manifest. 

The  crop  of  oats  was  somewhat  below  the  average  in  yield,  but 
the  course  of  prices  and  the  immense  receipts  at  Chicago  indi- 
cate that  there  was  no  serious  shortage,  and  probably  increased 
acreage  fully  offset  the   small  yield. 

The  wheat  crop  of  Great  Britain  in  1854,  estimated  at  148 
million  bushels,  was  nearly  three  times  as  large  as  the  poor  crop 
of  the  previous  year,  and  almost  sufficient  for  home  requirements. 
But  for  the  Crimean  War,  prices  in  America,  as  well  as  in  Europe, 
would  have  been  low. 

The  following  table  gives  the  price  of  spring  wheat,  corn, 
oats  and  mess  pork  in  the  Chicago  market  on  the  first  day  of  each 
month  during  the  year  1854: 

Spring  Corn,  per  bu. 

Wheat.  of  60  lbs.  Oats.  Mess  Pork. 

January   92-95  33-40  26  -26i  12.50-13.00 

February    117-120  45-46  30-31  12.50 

March    104-106  49-50  27  -28ii  13.00 

April    100  43-44  26^27  13.00 


[1855]  OF  THE  CITY  OF  CHICAGO  201 

Spring  Corn,  per  bu. 

Wheat.  of  60  lbs.  Oats.  Mess  Pork. 

May    125-130  43-45  30  -31  12.00-12.50 

June   128-130  45-46  30  -314  12.00-12.50 

July  95-100  50-51  31  -33  12.00 

August   95-110  54-55  29-30  12.00 

September   100-120  60-61  32-33  13.00-13.50 

October  90-105  54-55  33  -34  13.00 

November 120-125  50-52  32  -33  12.50-13.00 

December   100-110  46-47  28  11.00-12.00 

1855 

There  was  great  dissatisfaction  in  Chicago  on  account  of  the 
selection  of  a  lot  on  the  corner  of  Dearborn  and  Monroe  Streets  by 
the  U.  S.  Government  as  a  site  for  a  Custom  House  and  Post  Office. 
Everybody  felt  that  it  was  too  far  from  the  center  of  business, 
and  many  indignation  meetings  were  held  in  the  hope  of  inducing 
the  Secretary  of  the  Treasury  to  change  his  decision.  The  Board 
of  Trade,  on  the  22nd  of  January,  "better  late  than  never,"  as  one  of 
the  newspapers  indicated,  adopted  a  resolution  advising  the  sale 
of  the  lot  which  had  been  purchased  somewhat  secretly,  and  the 
selection  of  a  building  site  more  convenient  for  the  business  men 
of  the  city.  No  attention  was  paid  to  this  recommendation,  or  to 
the  wishes  of  the  citizens  of  Chicago,  as  expressed  by  the  Common 
Council. 

The  winter  ofl854-5  was  marked  by  the  heaviest  snow-fall  in 
twenty  years,  and  all  railroads  leading  to  Chicago  were  blocked 
by  snow-drifts  much  of  the  time.  Receipts  of  grain  were  light  in 
consequence  of  the  snow  blockade,  and  because  the  railroads  were 
unable  to  bring  in  the  great  number  of  dressed  hogs  which  were 
awaiting  transportation  from  the  interior,  and  which,  as  perish- 
able property,  were  given  preference. 

On  the  8th  of  March  a  fifth  all  rail  route  to  the  Mississippi 
River  was  opened  over  the  Chicago  and  Aurora  to  Mendota,  the 
Central  Military  Tract  R.  R.  to  Galesburg,  and  the  Peoria  and 
Oquawka  to  Burlington,  Iowa,  and  the  result  was  the  diversion  of 
the  trade  of  a  rich  portion  of  Iowa  from  St.  Louis  to  Chicago. 

The  grain  storage  of  the  city  was  again  taxed  to  its  utmost 
capacity  before  the  winter  was  over,  and  vessels  in  the  river  were 
loaded  in  an  effort  to  make  more  room  for  fresh  arrivals.  Lack  of 
storage  was  undoubtedly  responsible  for  the  fact  that  early  in 
March  Milwaukee  elevators  held  397,000  bushels  of  wheat  against 
354,180  bushels  in   Chicago. 

In  the  latter  part  of  March,  Gibbs,  Griffin  &  Co.'s  elevators  on 
North  Water  Street,  west  of  Wells  Street,  capacity  500,000  bushels, 
and  Munger  &  Armour's,  capacity  300,000  bushels  were  completed 


202  HISTORY  OF  THE  BOARD  OF  TRADE  [1855] 

and  began  to  receive  grain,  more  than  doubling  the  storage  facili- 
ties of  the  city.  Small  as  the  larger  of  these  elevators  was,  judged 
by  modern  standards,  it  was  a  great  advance  upon  anything 
previously  attempted,  and  was  considerad  at  the  time  a  "gigantic" 
affair,  with  its  river  frontage  of  60  feet,  Galena  Railroad  frontage 
110  feet  and  depth  190  feet. 

On  the  16th  of  March  President  Pierce  issued  his  proclamation 
announcing  that  the  Reciprocity  Treaty  with  Canada  was  in  effect 
from  that  date. 

"Scotch  George"  Smith  was  still  putting  into  circulation  the 
bills  of  the  Bank  of  the  Interior,  a  Georgia  institution  which  he 
owned,  and  whose  issues  he  guaranteed  by  advertisements  which 
he  inserted  in  the  daily  press  of  the  City. 

Some  other  Chicago  bankers  bought,  or  organized,  banks  in 
Georgia,  and  put  the  issues  of  these  "banks"  in  circulation  in  the 
City,  while  others  used  every  effort  to  discredit  this  so-called 
"wild  cat"  currency,  and  the  result  was  a  warfare  which  seriously 
interfered  with  the  business  of  Chicago  and  its  tributary  territory. 

Early  in  1856,  a  committee  of  the  Georgia  Legislature  made  an 
examination  of  the  affairs  of  the  Bank  of  Atlanta,  one  of  George 
Smith's  institutions,  and  recommended  the  revocation  of  its  charter, 
and  urged  that  criminal  proceedings  be  instituted  against  its  officers. 
(Democratic  Press,  February  7,  1855.)  George  Smith  was  bitterly 
denounced  for  his  financial  methods.  The  Legislature,  however, 
by  a  two-thirds  vote  laid  the  report  of  the  committee  on  the  table, 
thus,  in  effect,  exonerating  Mr.  Smith. 

The  total  number  of  hogs  packed  in  the  West  during  the  last 
packing  season,  November  1st,  1854,  to  March  1st,  1855,  was, 
according  to  a  statement  issued  April  4th  by  the  Cincinnati  Price 
Current,  an  acknowledged  authority  on  the  subject,  2,124,104,  a 
deficiency  of  349,403,  compared  with  the  previous  season.  This 
decrease,  however,  was  nearly  all  in  the  Ohio  and  Central  Missis- 
sippi Valleys,  the  States  of  Ohio,  Indiana,  Kentucky  and  Tennes- 
see showing  a  great  falling  off,  Missouri  remaining  almost  sta- 
tionary, and  Illinois  and  Iowa  showing  large  gains.  Wisconsin 
packing  decreased  about  20  per  cent. 

Ohio  with  571,105,  and  Indiana  with  505,830  still  led  the  packing 
business  of  the  West,  Illinois  reporting  only  413,946  at  the  46  pack- 
ing points  enumerated.  Of  these,  the  only  ones  outside  of  Chicago 
which  packed  more  than  20,000  hogs  were:  Beardstown,  22,400; 
Quincy,  32,443;  Alton,  23,000;  Canton,  28,170;  Peoria,  30,000; 
Springfield,  23,000. 

St.  Louis  is  credited  with  packing  89,830,  and  Milwaukee  34,000. 

Cincinnati,  which  was  ahead  of  all  rivals  as  a  packing  center, 
although  closely  followed  by  Louisville,  was  reported  some  weeks 
earlier  to  have  packed  355,786  hogs  during  the  season,  this  being 
more  than  75,000  less  than  the  previous  season's  packing. 


11855]  OF  THE  CITY  OF  CHICAGO  203 

The  Seventh  Annual  Meeting  of  the  Board  of  Trade  was  held 
at  the  rooms  of  the  Board,  April  2nd,  1855.  The  following  officers 
were  elected : 

Hiram  Wheeler,  President. 

S.  B.  Pomeroy,  Vice-President. 

W.    W.    Mitchell,    Secretary    and    Treasurer. 

The  Post  Office  came  up  again  for  discussion  and  a  committee 
of  three  was  appointed  to  inquire  into  the  expediency  of  taking 
measures  to  secure  a  re-location  of  the  same. 

A  committee  of  five  was  appointed  to  receive  subscriptions  for 
improvement  of  the  St.  Clair  Flats,  according  to  a  plan  proposed  by 
the  Bufifalo  Board  of  Trade. 

At  the  adjourned  meeting  of  the  Board  held  on  the  following 
Monday,  it  was  resolved  that  the  daily  meetings  should  begin  at 
11:30  o'clock,  A.  M.  Several  new  members  were  admitted  and  a 
committee  was  appointed  "to  take  measures  for  securing  a  proper 
and  permanent  location  for  the  Board." 

Early  in  May  it  was  announced  in  the  daily  press  that  the  Board 
of  Trade  had  voted  "to  have  its  daily  meetings  on  'Change  at  9:30 
o'clock,  instead  of  11  :30  as  heretofore."  This  change  of  hour  was 
a  decided  improvement,  the  meetings  were  well  attended,  and  much 
of  the  business  was  despatched  in  the  early  part  of  the  day.  (Demo- 
cratic Press,  May  10  and  12,  1855.) 

Navigation  did  not  open  until  after  the  1st  of  May,  and  not- 
withstanding the  great  increase  in  warehouse  facilities  provided 
by  the  Gibbs-Griffin  and  Munger  &  Armour  elevators,  and  the 
quantity  of  grain  put  afloat  in  vessels,  all  the  storage  room  in  the 
city  was  filled,  and  on  the  5th  of  May  it  was  announced  that  there 
were  no  buyers  for  corn  in  bulk,  because  there  was  no  place  to 
unload  it.  The  fleet  from  Buffalo  arrived  a  few  days  later,  and 
partially  relieved  the  congestion.  (Democratic  Press,  May  9,  1855.) 
The  relief  was  temporary,  and  the  elevators  were  full  again  on  the 
16th  of  May. 

The  Lake  Shore  Railroad  from  Chicago  to  Milwaukee  was 
completed,  and  the  first  train  left  Chicago  for  the  Wisconsin  metrop- 
olis on  the  19th  of  May,  1855. 

A  new  bar  had  formed  across  the  direct  entrance  to  the  harbor, 
greatly  interfering  with  navigation,  and  about  the  middle  of  July, 
at  a  meeting  of  the  Board  of  Trade,  a  committee  was  appointed 
to  collect  subscriptions  toward  defraying  the  expense  of  dredging, 
and  to  superintend  the  work,  it  being  understood  that  the  Common 
Council  would  pay  one-half  the  cost  of  a  thorough  opening  of  the 
channel.     (Democratic   Press,  July   16,   1855.) 

William  Bross,  one  of  the  editors  of  the  Democratic  Press, 
and  afterwards  Lieutenant  Governor  of  the  State,  was  an  enthusi- 
astic advocate  of  a  ship  canal  from  Georgian  Bay  to  Lake  Ontario, 


204  HISTORY  OF  THE  BOARD  OF  TRADE  [1855] 

and  his  paper  frequently  urged  action  upon  this  scheme.  On  the 
28th  of  July,  a  meeting  of  the  Board  of  Trade  was  called  to  con- 
sider resolutions  of  the  Board  of  Trade  of  Toronto  offering  to 
cooperate  with  the  merchants  of  Chicago  and  Oswego  in  making 
a  survey  of  the  proposed  route  of  the  canal.  The  Board  of  Trade 
approved  the  idea  of  a  survey,  appointed  a  committee  to  solicit 
subscriptions  towards  the  necessary  expense,  and  asked  the  Boards 
of  Trade  and  executive  officers  of  Milwaukee,  Toronto,  Kingston, 
Montreal,  Quebec,  Ogdensburg,  Oswego  and  Rochester  to  join 
in  this  preliminary  work.  Several  hundred  dollars  was  subscribed 
by  members  of  the  Board. 

The  delegates  from  Chicago,  Oswego,  and  elsewhere,  met  in 
Toronto  September  13th,  resolved  that  the  Canadian  Government 
ought  to  construct  "duplicate  locks  on  the  Welland  Canal,  or  a 
new  canal  if  practicable,  between  Toronto  and  Lake  Huron," 
appointed  committees  "to  take  steps"  to  collect  funds  for  a  thorough 
survey  of  the  proposed  route  between  the  two  lakes,  and  adjourned. 
On  the  16th  of  October,  George  Steel  and  William  Bross,  the 
Chicago  committee  made  a  report  to  the  Board  of  Trade,  and  the 
Board  adopted  resolutions  congratulating  those  who  were  inter- 
ested, that  Col.  R.  B.  Mason  had  consented  to  act  as  chief  or  consult- 
ing engineer,  calling  upon  the  business  men  of  Chicago  "to 
contribute  liberally  towards  the  expense  of  the  survey,"  and  recom- 
mending that  a  convention  be  held  in  Montreal  under  the  auspices 
of  the  Board  of  Trade  of  that  city. 

Finally  a  charter  of  incorporation  was  obtained,  but  nothing 
was  accomplished  towards  the  construction  of  the  canal,  and  a 
few  years  later,  Colbert  states  (page  50),  "the  subject  has  almost 
entirely  passed  away  from  the  memory  of  those  who  were  once 
its  most  earnest  advocates." 

The  semi-annual  meeting  of  the  Board  of  Trade  was  held 
October  1st.  The  standing  committee  was  empowered  to  make  a 
lease  of  a  suitable  suite  of  rooms  for  the  use  of  the  Board.  A 
committee  of  three  was  appointed  to  report  to  a  called  meeting  of 
the  Board,  a  tariff  of  commission  charges. 

At  the  adjourned  meeting  held  on  the  8th  of  October,  the 
committee  recommended,  and  the  Board  adopted,  the  following 
schedule : 

Commission  on  Sales  of  Grain,  Etc. 

Per  Bushel 

Wheat 2c 

Corn,  Oats  and  all  other  grains Ic 

Per  cent. 

On  sales  of  other  produce  or  property  of  any  kind,  over 
$100.00 2j4 

On  sales  of  other  produce  or  property  of  any  kind, 
under  $100.00 5 


[1855]  OF  THE  CITY  OF  CHICAGO  20S 

The  above  without  advance  or  acceptance — that  to  be  subject 
to  agreement. 

Without  agreement: 

Per  cent. 

For  advancing   2j^ 

For  accepting   2j/2 

For  guaranteeing  sales 2j4 

On  withdrawal  of  consignment,  Zy^  per  cent  on  amount  of 
expenses  incurred,  and  1^4  per  cent  on  invoice. 

On  charters,  2j/2  per  cent  on  freight  list.  For  effecting  marine 
insurance,  the  return  premium  and  scrip. 

On  Purchases  of  Grain,  Etc. 

Per  Bushel. 

For  purchasing  wheat  from  canal  boat  or  warehouse. .  Ic 

For  purchasing  wheat  from  railroad  in  small  lots 2c 

For  purchasing  corn  by  cargo Ic 

For  purchasing  oats  by  cargo -Jc 

For  purchasing  corn,  oats  and  other  grain  in  less  quan- 
tities than  cargo  lots Ic 

For  negotiating  Bills  (without  agreement) .  .  .1J4  P^r  cent. 

All  expenses  actually  incurred  to  be  added. 

Interest  to  be  charged  as  per  agreement.  Without  agreement, 
10  per  cent  to  be  the  rate. 

The  Board  adopted  the  following  resolution : 

"Resolved  that  the  above  be  considered  as  a  standard  of  rates 
proper  to  be  charged  in  the  absence  of  any  specific  agreement,  and 
that  members  of  this  Board  are  expected  to  adhere  to  the  same." 

During  the  year  a  reading  room  for  the  use  of  members  was 
projected,  and  it  was  voted  to  subscribe  for  New  York,  Boston, 
Montreal,  Buffalo,  Oswego,  Detroit  and  Cincinnati  newspapers. 

Many  members  of  the  Board  were  in  favor  of  abolishing  the 
free  lunch,  as  the  hospitality  of  the  organization  had  been  abused; 
but  this  seemed  to  others  inexpedient,  and  as  a  compromise  a  door- 
keeper was  employed  to  keep  out   the   "deadheads." 

A  condition  of  crop  exhaustion  developed  in  the  Ohio  and 
Central  Mississippi  Valleys  in  the  spring  of  1855,  similar  to  the 
one  already  described  as  existing  in  1850,  when  prices  were  high 
enough  in  St.  Louis  to  draw  wheat  and  flour  in  large  quantities 
from  Lake  Michigan  ports  north  of  Chicago.  If  the  situation  was 
less  acute,  in  1855,  and  the  wants  of  the  southern  country  more 
easily  supplied,  the  demand  was  equally  urgent  while  it  lasted; 
and  if  Chicago  stocks  of  wheat  were  not  so  heavily  drawn  upon  as 
in  1850,  this  was  due  to  the  settlement  in  the  interim  of  a  productive 
wheat  region  west  of  the  Mississippi  and  on  the  upper  watei"s  of 
that  river,   whose   surplus,   naturally   tributary   to   Chicago,   could 


206  HISTORY  OF  THE  BOARD  OF  TRADE  [185SJ 

be  attracted  to  the  Missouri  metropolis  by  extreme  prices.  Besides, 
the  East  was  in  need  of  supplies,  and  if  Alton  millers  were  paying 
$2.00  per  bushel  for  choice  winter  wheat  (Democratic  Press,  April 
3rd,  1855),  and  St.  Louis  $2.35,  mills  in  Rochester,  N.  Y.,  paid  $2.55 
for  the  choice  wheat  of  the  Genesee  Valley.  (Democratic  Press, 
April  14th,  1855.) 

The  scarcity  of  corn  in  the  region  mentioned  was  due  to  the 
drouth  of  the  previous  year,  and  in  some  places  in  Southern  Illinois 
corn  was  reported  to  have  sold  at  a  dollar  a  bushel.  (Democratic 
Press,  April  17th),  and  hay  at  $20.00  per  ton. 

The  actual  scarcity  of  corn,  the  apprehension  of  an  exhaustion 
of  the  wheat  supply  before  another  harvest,  and  the  Crimean  War 
combined  to  excite  a  wild  speculation  in  breadstufifs  in  the  spring 
of  1855,  which  soon  carried  them  above  their  export  value,  with  the 
result  that  the  exports  of  New  York  from  January  1st,  1855,  to 
April  14th,  were  only  28,803  bushels  of  wheat,  and  141,714  barrels 
of  flour  (Democratic  Press,  May  10-12,  1855),  and  for  the  next  five 
months  even  less.     (Democratic  Press,  July  30th.) 

The  St.  Louis  market  drew  only  about  50,000  bushels  of  wheat 
from  Chicago,  but  a  much  larger  quantity  from  the  Canal  and  Illi- 
nois River,  which  Chicago  considered  its  own  tributary  territory. 
This  practical  demonstration  that  the  interior  was  short  of  wheat 
started  a  discussion  in  the  newspapers  as  to  a  sufficiency  of  supplies 
for  domestic  use,  and  this  doubtless  had  something  to  do  with  the 
great  advance  which  followed,  and  which  did  not  culminate  until 
about  the  middle  of  May  when  red  winter  wheat  was  quoted  in 
Chicago  at  $1.90@2.00  per  bushel  and  spring  wheat  at  $1.70@1.75. 
Much  higher  prices  were  paid  both  east  and  west,  as  already  in- 
timated. 

In  New  York,  flour,  corn  and  (later)  rye  were  the  favorite 
speculative  articles,  and  from  April  to  December  sales  for  future 
delivery  were  made  on  the  New  York  Exchange  almost  every  day. 
Some  extracts  from  the  market  reports  telegraphed  to  the  Chicago 
daily  papers  indicate  the  magnitude  of  the  business  in  futures  in 
New  Y^rk.  On  the  31st  of  May  the  market  telegram  reads  (in 
part)  :  "May  contracts  (flour)  were  settled  today  at  a  loss  of  one 
dollar  per  barrel  to  the  seller."  On  the  11th  of  June  the  telegram 
says,  "the  bears  are  making  the  most  strenuous  efforts  to  break  the 
market  (for  flour),  while  the  bulls  of  course,  do  all  they  can  to 
sustain  it."  On  the  25th  of  June  New  York  wires,  "A  large  specu- 
lative seller  is  making  arrangements  to  turn  over  about  25,000 
barrels  on  Monday  next."  On  the  10th  of  July  the  New  York 
market  telegram  reads,  "The  greater  portion  of  the  sales  of  wheat 
are    for    September,    October   and    November   delivery." 

"Such  was  the  confidence  of  dealers  in  a  continuance  of  high 
prices,  that  large  contracts  were  made  in  March  for  the  delivery 
of  Indian  corn  in  June  and  July,  as  high  as  $1.05,  and  some  of  those 


[1855]  OF  THE  CITY  OF  CHICAGO  207 

time  engagements  were  settled  in  June  at  98c  to  $1.00,  and  some 
have  been  since  settled  in  July,  as  low  as  91@92.  Flour  contracts 
were  made  for  June  and  July,  deliverable  at  about  $8.75@9.00, 
which  have  since,  in  many  cases  been  settled  at  much  lower  figures," 

Evidently  the  speculation  in  New  York  had  assumed  great 
proportions,  as  it  had  in  Chicago,  and  while  these  two  cities  trans- 
acted most  of  this  business,  they  had  no  monopoly  of  it.  St. 
Louis,  New  Orleans,  Milwaukee  and  Buffalo  occasionally  reported 
sales  of  grain  for  future  delivery — often  enough  to  show  that  they 
were  not  strangers  to  the  practice. 

In  Chicago  the  business  in  futures  was  heavy  and  almost  con- 
tinuous. The  speculative  interest  centered  in  corn,  and  from  the 
middle  of  March  until  the  close  of  November  transactions  for  future 
delivery  were  frequent,  involving  sometimes  large  quantities. 

Speaking  of  the  week  ending  October  16th,  in  which  wide  fluc- 
tuations occurred,  the  Democratic  Press  says :  "The  week  has 
been  one  of  intense  excitement  in  the  grain  market  *  *  *  and 
large  sums  of  money  have  been  made  and  lost  by  parties  to  the 
speculations  of  the  day." 

In  November,  the  French  government  made  heavy  purchases 
of  wheat  in  Chicago  for  shipment  to  France.  Mr.  E.  H.  Hadduck 
was  credited  with  acting  as  purchasing  agent,  and  between  the 
1st  and  19th  of  November  he  paid  out  for  wheat  $1,200,000.00,  all 
of  which  was  believed  to  be  for  French  account.  So  far  as  known 
this  was  the  first  time  in  the  history  of  the  Chicago  grain  market 
that  European  buyers  had  given  New  York  the  "go-by,"  and  sup- 
plied their  wants  in  Chicago.  (Democratic  Press,  November 
19th,  1855.) 

There  was  little  disposition  in  New  York  to  speculate  in  pork 
product  prior  to  this  time,  but  early  in  October  it  was  reported  from 
Cincinnati  that  contracts  had  been  made  for  hogs  in  Indiana  for 
December  and  January  delivery.  Louisville  reported  in  April  the 
purchase  of  live  hogs  for  delivery  in  the  pens  in  Indiana  during 
the  following  December.     (Democratic   Press,  April  9.) 

Early  in  October  the  New  York  market  telegram  speaks  of 
the  pork  market  of  that  city  as  "quite  excited  by  reason  of  a  spec- 
ulative movement  for  forward  delivery."  (Democratic  Press,  Octo- 
ber 11,  1855.)  During  the  remainder  of  the  year,  sales  of  pork,  lard 
or  meats  in  New  York  for  future  delivery  were  frequently  reported 
in  the  market  telegrams  which  appeared  in  Chicago  newspapers. 

While  the  speculation  in  wheat  culminated  in  May,  as  already 
stated,  the  market  declined  gradually  until  after  the  middle  of 
July,  when  it  was  realized  that  the  supply  of  old  wheat  was  suf- 
ficient for  domestic  use,  and  that  a  new  crop  exceeding  all  previous 
records  was  practically  assured.  Then  a  sudden  collapse  in  prices 
occurred.  In  a  week  wheat  declined  in  Chicago  30(§35  cents  per 
bushel ;  Baltimore  reported  a   decline  in   red   winter  wheat  of  60 


208  HISTORY  OF  THE  BOARD  OF  TRADE  [1855] 

cents  a  bushel  in  five  days,  and  Louisville  (Journal,  July  17),  a 
decline  of  72  cents  within  a  week. 

The  decline  enabled  exporters  to  ship  to  Great  Britain  at  a 
profit,  farmers  stopped  selling,  and  the  market  soon  recovered,  the 
upward  tendency  being  accelerated  later  by  news  of  a  partial  failure 
of  the  harvest  in  England,  France  and  Germany,  and  the  knowledge 
that  agents  of  the  French  government  were  coming  to  America  to 
purchase  breadstuffs.  Spring  wheat  which  touched  $1.00  per  bushel 
about  the  1st  of  August  again  advanced  to  $1.60  or  more  in  Octo- 
ber and  did  not  fall  much  below  $1.50  in  Chicago  until  the  close  of 
navigation. 

The  advance  in  corn  culminated  in  the  last  half  of  May  when 
it  sold  as  high  as  80  cents  per  bushel  for  June  and  July  delivery. 
From  this  time  until  the  1st  of  November  it  was  seldom  below  65 
or  above  75,  but  it  was  lower  in  November  and  declined  to  50@55 
cents  a  bushel  when  navigation  closed. 

Oats  were  carried  up  to  48@50  cents  per  bushel  early  in  June 
and  did  not  fall  below  40  cents  until  new  oats  came  on  the  market 
in  August.  In  September  they  declined  to  25,  from  which  there 
was  a  moderate  recovery  before  the  close  of  the  year. 

Owing  to  the  late  opening  of  navigation  and  the  consequent 
accumulation  of  grain  in  Chicago,  freights  were  very  high  early 
in  the  season.  On  the  15th  of  March  a  vessel  was  chartered  for 
wheat  to  Bufifalo  at  15  cents  per  bushel,  but  early  in  April  19  cents 
was  paid  on  corn  to  Buffalo  (sail),  and  21  cents  (steam).  In  May 
the  rate  declined  from  15  cents  to  11  cents;  in  June  to  6  cents;  in 
July  to  3  cents ;  advanced  in  August  to  7^  cents ;  declined  in 
September  to  5  cents,  and  advanced  in  October  to  14  cents,  and 
the  last  charter  reported  in  November  was  10  cents  on  wheat  to 
Buffalo.  Erie  canal  freights  on  the  other  hand  were  reasonable, 
and  on  the  1st  of  May  a  charter  was  made  for  corn  from  Chicago 
to  New  York,  Lake  and  Canal,  at  27  cents  per  bushel.  On  the  10th 
of  May  the  Erie  Canal  rate  on  corn,  Bufifalo  to  New  York,  was 
11 3/2  cents,  and  during  the  remainder  of  May,  June,  July,  August 
and  September  it  was  11  to  14  cents,  only  one  quotation  (16)  higher 
than  14  cents,  appearing  on  the  20th  of  September.  In  October 
12^@16  was  the  range,  and  in  November  22  cents  was  paid  on 
wheat,  the  equivalent  of  19(§20  cents  on  corn. 

Ocean  freight  on  the  wheat  purchased  by  the  French  govern- 
ment in  Chicago  was  23@24  cents  per  bushel,  New  York  to  Havre, 
the  Liverpool  rate  from  New  York,  at  the  same  time,  being  16@17 
cents. 

The  census  of  1855  showed  a  population  of  83,509  in  Chicago, 
and  it  was  estimated  that  during  the  year  more  than  100,000  square 
miles  of  new  territory  had  been  brought  into  direct  relation  with 
the  City  by  the  extension  of  the  railroad  systems  of  the  west,  and 
the  opening  in  June  of  the  Sault  Canal  to  Lake  Superior.     Among 


[1855]  OF  THE  CITY  OF  CHICAGO  209 

the  most  important  of  these  railway  extensions  were  the  C,  B.  &  Q. 
extension  to  Burlington  (already  mentioned),  the  completion  of  the 
"Lake  Shore"  railroad  to  Milwaukee  on  the  21st  of  May,  connecting 
Chicago  with  Milwaukee's  system  of  railways  running  west  and 
north  of  that  city,  the  completion  of  the  Illinois  Central's  so-called 
"branch"  from  La  Salle  to  Dunleith  (in  reality  a  part  of  the  main 
line)  about  the  twelfth  of  June,  the  completion  of  the  entire  main 
line  of  the  Illinois  Central  on  the  28th  of  December,  the  comple- 
tion of  the  eastern  division  of  the  Mississippi  and  Missouri  Rail- 
road from  Davenport  to  Iowa  City  on  the  last  day  of  the  year,  the 
completion  of  the  Belleville  and  Illinoistown  (East  St.  Louis)  R.  R. 
giving  Chicago  direct  rail  communication  with  St.  Louis  (by  Mis- 
sissippi River  ferry),  the  completion  of  the  Galena  Air  Line  to 
Fulton,  November  27th,  giving  Chicago  its  sixth  rail  line  to  the 
Mississippi  River,  and  the  approaching  completion  of  the  Quincy 
branch  of  the  C,  B.  &  Q.,  which  was  finished  February  1st,  1856, 
and  which  gave  Chicago  its  seventh  rail  connection  with  the  Mis- 
sissippi River  (or  if  Dunleith  and  East  St.  Louis  be  counted,  its 
ninth  connection).  Then,  if  it  be  remembered  that  the  C.  &  R.  I. 
R.  R.  bridge  at  Rock  Island  was  nearly  finished ;  that  railroads 
were  already  pushing  westward  from  Dubuque,  Clinton,  Burling- 
ton and  Quincy,  as  well  as  from  Davenport ;  that  the  Chicago,  St. 
Paul  and  Fond-du-lac  R.  R.  was  building  towards  the  northwest  as 
fast  as  its  limited  means  would  allow,  and  that  every  railroad 
crossed  by  a  line  running  to  Chicago  became  a  feeder  for  that  line, 
it  is  easy  to  believe  that  the  estimate  of  100,000  square  miles  of 
new  territory  secured  to  Chicago  during  the  year  was  not  excessive. 

Chicago's  grain  business  grew  correspondingly,  total  receipts 
for  the  year  being  19,284,643  bushels  of  grain  and  240,662  barrels 
of  flour.     The  flour  was  equivalent  to  1,203,310  bushels  of  wheat. 

The  quantity  of  flour  manufactured  in  Chicago  in  1855  by  the 
three  principal  mills,  viz.,  the  "Adams  Mill,"  the  "Chicago  Mills" 
and  the  "Hydraulic  Mills"  was  79,650  barrels,  an  increase  of  more 
than  13,000  barrels  for  the  year. 

Total  shipments  of  grain,  including  the  flour  equivalent,  were 
16,633,813  bushels,  an  increase  of  more  than  25  per  cent  over  the 
preceding  year,  viz. : 

Wheat   6,298,155  bushels 

Flour  (equivalent  to) 817,095 

Corn    7,517,625 

Oats    1,889,538 

Rye   and   barley 111,400 

Total   16,633,813 

The  following  tables  from  the  Annual  Review  of  the  Demo- 
cratic  Press,   illustrate   this  growth,   and   show   the   sources   from 


210 


HISTORY  OF  THE  BOARD  OF  TRADE 


[1855] 


which  the  business  came.  The  figures  for  the  Galena  &  Chicago 
Union  Railroad  include  the  Chicago  Burlington  &  Quincy  and  the 
main  line  of  the  Illinois  Central,  both  of  which  reached  the  City  over 
the  tracks  of  the  G.  &  C.  U. 


Receipts  and  Shipments  of  Flour  in  1855 

Receipts  Shipments 

Barrels  Barrels 

By  Lake 4,885  77,082 

By  Canal    13,239  372 

By  Galena  R.  R 129,843  2,825 

By  M.  S.  R.  R 1,031  31,335 

By  M.  C.  R.  R 1,657  51,041 

By  C.  &  R.  I.  R.  R 78,343  604 

By  111.  Central  R.  R.  (Chicago  Branch) 11,308  

By  111.  &  Wis.  R.  R 356  160 

Manufactured  in  City 79,650  

City  consumption  and  balance  on  hand 156,893 

Total   320,312  320,312 

Receipts  of  Wheat  in  1855 

Bushels 

By  Lake 4,946 

By  Canal 923,021 

By  Galena  R.  R 4,513,202 

By  M.  S.  R.  R 2,270 

By  M.  C.  R.  R 4,939 

By  C.  &  R.  I.  R.  R 990,689 

By  111.  Central  R.  R 771,651 

By  111.  &  Wis.  R.  R 124,379 

By  Teams 200,000 

Total   7,535,097 

Shipments  of  Wheat  in  1855 

Bushels 

By  Lake    5,719,168 

By  Canal    59,880 

By  M.  S.  R.  R 176,533 

By  M.  C.  R.  R 342,288 

By  C.  &  R.  I.  R.  R 286 

Ground  in  Chicago 398,250 

Used  by  distillers,  shipped,  on  hand  and  unaccounted  for.      838,692 

Total   7,535,097 


[1855]  OF  THE  CITY  OF  CHICAGO 

Receipts  of  Com  and  Oats  in  1855 

Corn 
Bushels 

By  Canal    3,701,441 

By  Galena  R.  R 3,761,619 

By  M.  S.  R.  R 

By  M.  C.  R.  R 8,918 

By  C.  &  R.  I.  R.  R 350,123 

By  111.  Central  R.  R 472,654 

By  111.  &  Wis.  R.  R 37,622 

By  Teams    200,000 

Total  8,532,377 


211 


Oats 

Bushels 

1,020,360 

1,107,268 

211 

3,064 

146,323 

223,386 

46,576 

400,000 

2,947,188 


Shipments  of  Com  and  Oats  in  1855 

Corn 
Bushels 

By  Lake : 7,439,259 

By  Canal    

By  M.  S.  R.  R 4,189 

By  M.  C.  R.  R 74,177 

By  C.  &  R.  I.  R.  R 

Ground  in  City  Mills 30,370 

Used  by  Distillers 200,000 

On  hand,  consumed  and  not  accounted  for      784,382 

Total   8,532,377 


Oats 

Bushels 

1,821,435 

110 

1,566 

65,288 

139 


1,058,650 


2,947,188 


Receipts  of  Rye  and  Barley  in  1855 

Rye  Barley 

Bushels  Bushels 

By  Lake   55,587 

By  Canal    5,139  204 

By  Galena  R.  R 39,827  93,976 

By  C.  &  R.  I.  R.  R 12,960  5,931 

By  111.  Central  R.  R 4,603  250 

By  111.  &  Wis.  R.  R 1,557  10,473 

By  M.  S.  R.  R 224 

By  M.  C.  R.  R 5,250 

By  Teams    4,000  30,000 

Total   68,086  201,895 


212  HISTORY  OF  THE  BOARD  OF  TRADE  [1855] 

Shipments  of  Rye  and  Barley  in  1855 

Rye  Barley 

Bushels  Bushels 

By  Lake 18,521  1,315 

By  Canal    797  50,413 

By  M.  C.  R.  R 14,415 

By  C.  &  R.  I.  R.  R 16,268 

By  M.  S.  R.  R 9,671 

Used  by  Distillers 48,768  

Used  by  Brewers 109,813 

Total   68,086  201,895 

The  beef-packing  of  the  year  was  conducted  by  seven  packing 
firms  and  the  total  number  of  cattle  slaughtered  was  28,972,  an 
increase  over  the  previous  year  of  more  than  5,000  head. 

The  number  of  barrels  of  beef  packed  was  62,687,  which  com- 
pared with  54,108  barrels  in  1854. 

The  value  of  the  beef  products  in  1855  is  given  as  $1,152,420.96. 

In  addition  to  the  number  of  cattle  packed  in  Chicago,  8,253 
head  were  shipped  to  eastern  markets,  nearly  all  by  rail. 

Packers  paid  $3.25@3.7S  live  weight  for  most  of  the  cattle 
slaughtered  in  1855,  the  prices  for  dressed  (or  net)  beef  being  given 
in  the  "Review"  as  $6.50@7.50  in  September,  $5.50@6.25  in  Octo- 
ber, $6.00@6.50  in  November. 

The  receipts  of  hogs  during  the  packing  season  of  1855-6  were 
308,539.  Of  this  number  162,040  were  live  hogs  which  arrived  by 
rail,  and  146,499  were  dressed  hogs.  Of  the  dressed  hogs  the 
Galena  R.  R.  is  credited  with  bringing  in  112,721. 

The  packing  season  of  1855-1856  opened  very  late  in  Chicago. 
The  scarcity  and  consequent  high  price  of  mess  pork  during  the  late 
summer  and  autumn  had  given  farmers  exaggerated  notions  as  to 
the  value  of  hogs,  and  large  purchases  by  eastern  dealers  in  Novem- 
ber and  December  at  unwarrantable  figures  kept  Chicago  packers 
almost  out  of  the  market  until  January.  By  this  time  prices  of 
dressed  hogs  had  declined  l@lj^  cents  from  the  figures  quoted  in 
the  middle  of  November.  At  $4.75@5.25  per  hundred  pounds,  the 
prices  prevailing  about  the  middle  of  January,  the  packers  bought 
freely  and  the  slight  change  in  values  during  the  remainder  of  the 
season  was  in  the  direction  of  lower  prices. 

The  number  of  hogs  packed  in  Chicago  during  the  year  was 
80,380,  a  fair  increase  over  the  previous  year,  but  still  far  below  the 
packing  of  Cincinnati  and  Louisville,  the  smaller  of  these  two  lead- 
ers being  credited  with  packing  332,354  hogs  (Louisville  Commer- 
cial). Madison,  Ind.,  and  Terre  Haute  are  said  to  have  packed 
77,465  and  50,000  respectively. 

The  Cincinnati  Price  Current's  annual  statement  of  the  pack- 


[1855]  OF  THE  CITY  OF  CHICAGO  213 

ing  of  the  West  for  the  last  two  seasons,  issued  about  the  first  of 
April,  1856,  gives  the  following  figures,  by  States: 

1854-1855  1855-1856 

Hogs  Hogs 

Ohio 600,064  661,197 

Illinois    369,862  412,307 

Tennessee 14,200  62,400 

Missouri   130,501  189,144 

Kentucky    341,299  420,834 

Indiana   501,325  479,001 

Iowa  93,291  163,504 

Wisconsin   37,500  42,500 


2,088,042  2,430,887 

an  increase  of  342,845  head,  in  addition  to  which  there  was  an  in- 
crease of  11  per  cent  in  average  weight,  equivalent  to  229,453  hogs. 
The  total  increase  in  weight  of  pork  product  was  therefore  more 
than  25  per  cent. 

The  following  table  shows  the  price  of  spring  wheat,  corn, 
oats  and  mess  pork  in  the  Chicago  market  on  the  first  day  of  each 
month  during  the  year  1855 : 

1855                          Spring  Wheat  Corn  Oats  Mess  Pork 

January 108-120  43-44  26-27  $10.00@11.00 

February   113-118  51  30  10.00(5)11.00 

March    113-122  50-51  29-30  10.50@11.50 

April  135-145  54-55  34  12.50@13.00 

May 145-160  67-69  44-46  15.75@16.00 

June  165-170  75-76  48  16.00@16.25 

July    150-155  73  45-46  17.50@18.00 

August 100-110  71-72  44-45  18.00@19.00 

September    107-110  68-69  25-26  20.00@21.00 

October 129-130  63-64  25-26  21.00@22.00 

November 145-146  62-63  28-30  19.00@20.00 

December  125-135  50  28-30  17.50@18.00 

Even  these  figures  give  only  a  faint  idea  of  the  nerve-racking 
fluctuations  in  wheat,  recorded  in  the  daily  newspapers  of  the  pe- 
riod. The  great  scarcity  of  wheat  in  the  spring  of  the  year  and  the 
abundant  American  harvest  a  few  months  later,  the  Crimean  War 
and  the  rumors  of  peace  which  soon  followed  the  surrender  of  Sebas- 
topol  in  September,  together  with  the  uncertainty  attending  the 
negotiations  were  conflicting  influences  which  made  frequent  and 
violent  changes,  often  without  apparent  reason.  The  following 
quotations  from  reports  in  the  Democratic  Press  give  an  idea  of 
the  sort  of  market  the  grain  traders  of  1855  had  to  transact  busi- 


214  HISTORY  OF  THE  BOARD  OF  TRADE  [1855] 

ness  in.  The  dates  are  those  of  the  newspaper  report,  and  they 
chronicle,  usually,  the  market  of  the  previous  day.  The  quotations 
are  for  merchantable  wheat  of  fair  quality  in  store,  unless  otherwise 
indicated.  The  great  advance  began  about  the  middle  of  March. 
Quotations  per  bushel  for  spring  wheat  in  1855  were : 

@  1.73 
@  1.68 
@  1.65 
@  1.65 
@  1.65 
@  1.55 
@  1.58 
@  1.65 
@  1.60 
@  1.65 
@  1.62 


March 

9 

$1.12  @  1.20 

10 

1.18  @  1.20 

14 

1.18  @  1.22 

15 

1.18  @  1.22 

17  to  26. . . . 

1.18  @  1.22 

28  (prime  mill'g) .    1.30  @  1.31 

30  (prime  mill'g) .     ...   @  1.33 

31  (prime  mill'g) .     ...   @  1.35 

April 

2 

1.35  @  1.40 

3 

1.33  @  1.45 

4 

@  1.40 

12 

1.36  @  1.40 

18 

1.40  @  1.50 

20 

1.50  @  1.55 

23 

1.55  @  1.65 

26 

1.60  @  1.65 

28 

1.55  @  1.60 

30 

1.50  @  1.60 

May 

2 

@  1.50 

3  (common 

i)  ....   1.40  @  1.45 

3  (choice) 

@  1.50 

5  (choice) 

1.50  @  1.55 

7  (choice) 

1.60  @  1.65 

10 

1.50  @  1.65 

12 

1.55  @  1.65 

15 

1.60  @  1.70 

16 

1.60  @  1.75 

21 

1.70  @  1.75 

23 

1.60  @  1.75 

24 

1.55  ®  1.65 

31 

1.63  @  1.66 

June 

1 

1.65  @  1.72 

2 

1.65  @  1.70 

6 

1.65 

7 

1.60 

8 

1.60 

9 

1.55 

14 , 

1.60 

16 

1.50 

20 

1.52 

22 

1.55 

25 

1.55 

28 

1.58 

29 

1.55 

2 

July 
1.50 

6 

1.48 

7 

1 .45 

9  

13 

1.50 

21 

1.45 

23 

24 

25   (old).. 
25   (new). 
26 

1.20 

30 

1 .20 

31 

1 

August 

2 

1.00 

6 

1.20 

11 

1.20 

14 

1.25 

17 

1.25 

23 

1.18 

24       .... 

115 

25 

27 

1.10 

30 

1.10 

31 

1.05 

1.55 
1.50 
1.50 
1.50 
1.53 
1.50 
1.45 
1.10 
1.10 
1.25 
1.20 
1.25 
1.00 


@  1.00 

@  1.10 

@  1.30 

@  1.25 

@  1.30 

@  1.35 

@  1.28 

@  1.25 

@  1.10 

@  1.15 

@  1.12i 

@  1.10 


[1855] 


OF  THE  CITY  OF  CHICAGO 


215 


September 


1 

@  1.08 
@  1.10 

3 

1.07 

5 

1.00 

@  1.05 

8 

1.05 

@  1.07 

10 

@  1.10 
@  1.12i 

11 

1.10 

13 

1.12i@  1.15 

14 

1.15 

@  1.18 

15 

1.18 

@  1.20 

17 

1.16 

@  1.18 

18 

1.18 

@  1.22 

21 

1.23 

@  1.25 

22 

1.27 

@  1.28 

24 

@  1.30 
@  1.30 

26 

1.28 

27 

1.25 

@  1.26 

28 

1.26 

October 

@  1.28 

1 

1.27 

@  1.28 

2 

1.29 

@  1.30 

4 

1.27 

@  1.29 

5 

1.29 

@  1.30 

6 

1.30 

@  1.32 

8 

1.32 

@  1.33 

9 

1.36 

@  1.41 

10 

1.50 

@  1.51 

11 

1.52 

@  1.54 

12 

1.60 

@  1.63 

13 

1.40 

@  1.45 

15 

1.38 

@  1.40 

16 

1.40 

(S  1.45 

17. 

18. 

20. 

22. 

23 

26 

27. 

29. 

30. 


(f.  o.  b.)... 
(on  track) . 


1.45 
1.40 
1.45 
1.38 


1.48 
1.45 
1.44 


November 


1  (f.  0. 

2 

b.) 

1.45 

3 

1  47 

6 

1.52 

7 

8 

1.50 

10 

1.47 

12 

1  40 

13  (f.  0. 
15 

b.) 1.45 

1.47 

16 

1.50 

17  (f.  0. 
19  (f.  o. 
21 

b.) 

b.) 

151 

23 

24 

1.45 

28 

1.43 

1 

December 
1.25 

3 

1  25 

10 

@ 


@ 


1.48 
1.45 
1.46 
1.40 
1.48 
1.50 
1.49 
1.46 
1.45 


@  1.48 


@ 


@ 


1.46 
1.48 
1.53 
1.50 
1.52 
1.48 
1.45 
1.47 
1.48 
1.51 
1.50 
1.52 
1.53 
1.48 
1.48 
1.45 


1.30 
1.30 
1.30 


Lumber 

Next  to  the  grain  trade,  that  in  lumber  claimed  pre-eminence. 
Chicago  drew  her  supplies  from  the  valley  of  the  Susquehanna  in 
Pennsylvania,  from  Canada  and  the  St.  Lawrence,  but  chiefly  from 
Michigan  and  Wisconsin.  Her  shipments  of  lumber  extended 
some  distance  south,  and  as  far  to  the  west  as  transportation  was 
available.  About  nine  million  square  feet  came  in  over  the  Michi- 
gan Southern  and  Michigan  Central  railroads,  but  nearly  all  the 
unprecedented  arrivals  of  306,553,467  square  feet  were  received  by 
lake.  The  shipments  were  215,585,354,  leaving  90,968,113  square 
feet  as  the  local  consumption  and  the  stock  on  hand  January  1,  1856. 


216  HISTORY  OF  THE  BOARD  OF  TRADE  [18S6J 

Navigation 

The  number  of  vessels  arriving  by  lake  and  reporting  at  the 
Custom  House  was  5,410,  but  it  was  estimated  that  1,200  others 
arrived  from  domestic  ports  and  did  not  report.  The  following 
table,  classified  according  to  tonnage,  gives  a  good  idea  of  the  char- 
acter of  the  vessels  composing  the  lake  fleet  in  1855 : 

Steamers  under  500  tons 141 

Steamers  over  500  and  under  1,000  tons 237 

Steamers  1,000  tons  and  over 59 

Propellers  under  400  tons 193 

Propellers  400  tons  and  over 187 

Sail  vessels  under   150  tons 2,131 

Sail  vessels  150  and  under  350  tons 2,046 

Sail  vessels  350  and  under  500  tons 366 

Sail  vessels  500  tons  and  over 50 

Total 5,410 

The  total  tonnage  of  the  vessels  reporting  was  1,316,045  tons. 

The  frontier  hamlet  which  was  in  danger  of  an  Indian  massacre 
twenty-three  years  before,  and  which  six  years  later  was  importing 
all  its  breadstufifs  from  Ohio,  had  become  by  far  the  greatest  pri- 
mary grain  market  in  the  world,  the  increase  alone  in  its  shipments 
in  1855  over  the  shipments  of  1853  exceeding  the  entire  business  of 
Archangel,  its  nearest  European  competitor.  It  is  not  surprising 
that  its  fame  was  widespread  throughout  the  United  States,  or 
that  its  inhabitants  believed  its  present  splendid  accomplishments 
only  an  earnest  of  a  more  glorious  destiny. 

1856 

The  eighth  annual  meeting  of  the  Board  of  Trade  was  held  at 
the  Tremont  House,  April  7,  1856,  when  the  following  officers  were 
elected:  President,  C.  H.  Walker;  vice-president,  G.  C.  Martin;  sec- 
retary and  treasurer,  W.  W.  Mitchell;  directors,  J.  S.  Rumsey,  D.  R. 
Holt,  James  E.  Dalliba,  James  Peck,  William  Blair,  E.  Hempsted, 
John  P.  Chapin,  George  Armour,  S.  B.  Pomeroy,  L.  P.  Hilliard. 

The  Board  of  Trade  no  longer  needed  to  furnish  lunches  to 
attract  members  to  the  daily  meetings.  Cards  of  membership  were 
issued,  and  it  was  considered  a  privilege  to  belong  to  the  organiza- 
tion, and  to  attend  its  meetings. 

Farmers  and  owners  of  wheat  and  corn  were  reluctant  to 
accept  the  lower  market  prices  which  the  approaching  conclusion 
of  peace  in  Europe  rendered  inevitable,  and  receipts  during  the 
winter  of  1855-56  were  very  small.     The  treaty  of  Paris,  which 


No.  173 


Chicago,  Poiibau,  f  tmiibtr  i,  1856. 


s  o»cloc:k,  t».  Tto^ 


Deab  Sni—  Just  at  pn  stnt  there  is  very  liltle  of  interest  in  the  Flour  an  J  Grain  mar- 
ket, and,  as  usual  at  tliis  season,  business  is  quite  dull.  It  is  not,  however,  probable  that 
this  state  of  things  will  be  of  long  continuance.  A  very  fair  winter  biishie.«3  is,  we  believe, 
generally  anticipated.  The  warehouses  and  elevators  arc  now  nearly  empty,  and  our  stor- 
age capacity  was  never  before  so  large  or  so  ct'nvenicntly  located.  Prices  can  hardly  be 
expected  to  fall  to  any  lower  level  and  more  activity  must  soon  ensue-  Jn  Flour  nolluug 
doing,  f-pring  Wheat  in  moderate  demand  for  store  at  78c.  Limited  sales  Bed  at  90c.  and 
White  at  fl.Oo  in  store. 

Com  is  rather  unsettled  and  the  range  of  prices  unusunlly  wide,  dependingr  upon  circum- 
Ktances.  parcels  In  store  cannot  be  quoted  higher  than  :-t5c.  Moderate  lots  for  shipment  to 
the  lumber  districts  or  lor  distilling  will  bring  38  to  4flc.  Forced  sales  would  have  to  be 
made  at  inside  ligurcs,  owing  to  scarcity  of  buyf  rs. 

Oats  lower  and  dull  bt  32  to  33c.     Highwines  dull — held  generally  at  27c. 

The  Fork  market  is  tolerably  hrm  and  steady.  Not  much  doing  in  Dressed.  Live  are  in 
(,'ocd  demarid  for  shipment  at  quotations,  the  outside  being  occasionally  obtaiuetl  for  the 
btst  lois  and  under  favorable  circumstances. 

Keceipts  of  Flour  and  Grain  for  the  week  show  a  decrease  from  last  week  equivalent  to 
157,167  bu  ,  and  shipments  by  Lake  a  decrease  cqiiivHlent  to  345  882  bu. 

Temperature  40°.     Wind  East.     Weather  very  tine. 

New  Yokk.  Hom-  maikct  dull  and  drooping,  with  small  sales  at  Saturday's  prices. — 
Wheat  iuaclive  and  lower.  Sales  20,000  bu.  Chicago  Spring  $1.34,  Mil.  Club  $1.38  to 
1  40,  Red  Wesltrn  $1.50  to  1.58.  Corn  dull.  Sale  6,000  bu.  Mixed  72  to  73c.  Dressed 
Hugs  lirm  at  .$7.75. 


RECEIPTS  LAST  TWENTY-FOUR  HOUR. 


Floub. 

Wbiat. 

Coas. 

OiTB. 

Cattle. 

Live  Hogs. 

D.  FIOGB. 

(IblB. 

Bash. 

B,.A. 

h^A. 

No. 

Nd- 

N-j. 

By  III.  i  Mich.  Canal, 

.... 

By  Galena  U.  RR., 

512 

3,088 

1,000 

1,990 

21 

By  Rock  Island  RR., 

500 

300 

300 

1500 

350 

By  lU.  Central  RR., 

b-lO 

661 

853 

33 

By  Chi.  St.  P.  A  F.  RR., 

164 

1,176 

361 

30 

139 

1.203 

Total, 

4,272 

1  991 

3  629 

54 

Total  for  the  Week, 

8,322 

47,€88 

37,535 

42,938 

71 

8,100 

503 

SHIPMENTS  BT  LAKE. 

To  Buffalo, 

2  568 

1,000 

16,000 

To  Oswego,  - 

.... 

To  Other  Ports, 

4  93 
3,061 

Total, 

1,060 

16,000 

Total  for  the  Week, 

6,262 

36,900 

52,297 

4,700 

miPMENTS  BT  RAILROAD. 

By  Michigan  (Antral, 

100 

4  355 

1,775 

5,240 

Total  for  the  Week, 

556 

23,133 

1,776 

69 

12,327 

EXCHANGE.  I  OATS. 

On  NewYork,  buy.  \y^,  sell.  1  j^pr. Jn  Bnge,   ^  821b 5., 82©  .33 

de.  for  Gold  and  fiaatern,      @  >i  "  i  sr;iM¥»iiiF'« 

Lond.,,ighmi  6(id   ]0%®1,  9>i  .;  iR       i„  ,„»^  ^mllt  .im  M 
Gold,..buymgl,  selling     @    l>li 'VBarley,  •■  48         ).00@1.]6 

FLOt  K.  BeaDj,  1.7.5@2.I10 

rine,  ^  bbl J2.!.0@8.0(l  BuckKleat  Flour,  ¥100,2.!,'i@2,5(l 

Superfine,    No.  2, S0t@3.25:Tiinothy  Seed,  ^4.'jtt)B., 2.25^2.87 

Superfine,  No.  1, 8.6C@8.76  PoL-itoes,  80  .70®    76 

»aBcy, 4.0I1@4.25  Fioe  Salt,  ^  bW 1.96(a2.12 

Bitra,  Spring  to  Winter,  4.50(g)5.60:Wliite9bh,  br.btil.  NoJ,  4i(i(3i4.76 

Rio  Flour 4.5ii@6.00  Live  Hogs,  lOolbs.,  4iS<a4.62 

■WHEAT.  Dressed  Hogs,  4.7fi@B-87 

Spring  in  lots  to  store,         .    ®  .7.S  P;rk,  Mesa,  per  bbl,  @lr,.00 

Winter,  Red,  in  store  .90©  .92  Butter,^  »., no@  .23 

do.        do.No.S  .7b@  .80  Lard,  ^  lb., Oft',®    10 

.    @1.00  tlams,piclied,  ^  bbl.  I6.6«@I7.00 

.Hides, preen,  ^B>,...      .07®  .OS 

.86®  .88;    do.,  dry,  flint,  "  .    ®  .15 

T0DB5,    RBSFBOTTtrLLTT, 


do.       Wbite, 

CORN. 

In  Store,  V  5elt>a.,... 


jHigbwinee,  ^  gal., ®  .27 

}WbiBke.T,  ^  gal 28®  .29 

Eggs,  |t  doz 20®  .26 

Chickens,  drs'd  ^  doz...     1.7S@2.00 

iTurkies,       "      $  *> 09®  •l" 

I  FREIGHTS. 

:  Railroad  Tariff. 

To  Detroit.  To  Buffalo. 


.60 
.22  , 
,17 
.25  . 
.60 


.8* 


4S 


IFIour,  ¥  bbl 

,Wheat,  ^  100  lbs. 

Corn  and  Oats,  do. 

Pork  and  Beef,  do. 

Dressed  Hops,  do. 

I  Canal,  to  Nbw  Yobk. 

iWbeatperbu ®.2i 

Corn  "      @.1!0 

OCBAH,  TO  LiTERPOOL. 

Flonrperbbl ®293d 

Grain  "    lin Sda8>il( 


WK.  n.  C&SE  &  CO. 


[1856]  OF  THE  CITY  OF  CHICAGO  217 

brought  the  Crimean  War  to  a  close,  was  not  signed  until  the  30th 
of  March,  1856;  but  the  markets  of  the  world  had  been  for  months 
adjusting  themselves  to  a  condition  of  peace  which  was  fore- 
shadowed by  the  inactivity  of  the  military  forces,  and  by  the  evident 
willingness  of  both  belligerents  to  seek  some  basis  upon  which  an 
expensive  and  fruitless  war  could  be  ended. 

As  the  result  of  this  attitude  of  the  grain  producers  and  western 
speculators,  conditions  in  the  spring  of  1856  were  the  reverse  of 
those  which  prevailed  the  year  before,  when  the  elevators  were 
overflowing,  and  vessels  were  scarce.  On  the  1st  of  April,  1856, 
there  were  in  store  in  Chicago  all  kinds  of  grain,  only  447,600 
bushels,  while  vessels  with  a  capacity  of  1,500,000  bushels  were 
in  the  harbor  seeking  cargoes.  It  was  well  known  that  large 
amounts  of  corn  were  stored  in  warehouses  along  the  lines  of 
railway,  and  on  the  canal ;  and  before  the  close  of  February  heavy 
sales  were  made  for  spring  delivery.  May  being  the  favorite  month 
with  speculators.  On  the  13th  of  February  these  sales  of  corn  for 
future  delivery  aggregated  over  100,000  bushels.  From  this  time 
forward  most  of  the  buying  and  selling  was  done  on  'Change,  the 
market  review  of  the  1st  of  July  reporting  sales  of  more  than  200,000 
bushels  "on  'Change."  Most  of  the  corn  traders  now  adopted  56 
pounds  as  the  standard  bushel,  although  60  pounds  was  occasionally 
specified. 

New  York,  at  intervals,  reported  considerable  trade  in  pro- 
visions for  future  delivery,  but  the  speculation  in  grain  and  flour, 
which  was  active  there  in  1855,  almost  ceased  after  the  restoration 
of  peace  in  Europe,  and  the  great  decline  in  prices  which  occurred 
in  the  first  half  of  the  year,  and  which  the  New  York  "Economist" 
estimated  at  56  cents  per  bushel  in  the  case  of  white  winter  wheat, 
and  25  cents  in  corn. 

In  Chicago,  on  the  contrary,  dealing  in  "futures"  increased,  and 
on  the  4th  of  June  the  weekly  review  of  the  "Democratic  Press" 
reports  that  "the  great  bulk  of  transactions  in  corn  are  for  future 
delivery."  "Contracts  are  almost  daily  maturing."  It  is  evident 
too  that  the  race  of  "Bears"  had  already  appeared,  for  on  the  11th 
of  the  same  month  the  following  item  is  found:  "Thus  far  sellers 
have  made  all  the  money  at  the  expense  of  the  buyers."  Wheat 
had  declined  18@20  cents  during  the  week.  In  corn,  "buyers  are 
limited  to  one  or  two  'shorts,'  who  having  sold  largely  last  week 
at  higher  prices,  are  now  advantageously  providing  for  their  con- 
tracts." Light  is  thrown  upon  the  method  of  making  delivery  on 
contracts,  by  the  following  which  appeared  August  1,  1856:  "A 
single  lot  of  15,000  has  within  two  days  passed  through  fourteen 
hands,  and  in  these  transfers  settled  contracts  for  some  200,000 
bushels." 

Some  time  in  1856  Joel  H.  Wells  began  the  publication  of  the 
"Daily  Commercial  Letter,"  but  soon  discontinued  it  for  want  of 


218  HISTORY  OF  THE  BOARD  OF  TRADE  [18S6] 

patronage.  The  date  of  the  first  issue  appears  to  have  been  about 
May  15,  the  "Letter"  of  December  1  bearing  the  number  173.  On 
the  24th  of  May  subscribers  to  the  Chicago  "Market  Review"  and 
"Weekly  Price  Current"  were  notified  by  Mr.  Wells  through  the 
"Democratic  Press,"  of  which  he  was  commercial  editor,  that  the 
"Daily  Commercial  Letter"  "will  be  reissued  whenever  the  activity 
of  the  market  shall  require,  or  enough  subscribers  shall  have  given 
their  orders."  On  the  1st  of  May  the  Board  of  Trade  took  possession 
of  their  rooms  in  Walker's  Building,  No.  12  Dearborn  street,  at  a 
rental  of  $100  per  month,  and  it  was  announced  that  members  would 
be  furnished  with  admission  cards  on  application  to  the  secretary. 

The  commerce  of  Chicago  was  still  hampered  by  the  unsatis- 
factory conditions  at  the  mouth  of  the  harbor,  and  by  the  obstruc- 
tions at  the  St.  Clair  flats ;  but  the  authorities  at  Washington 
continued  to  turn  a  deaf  ear  to  all  appeals  for  help,  notwithstanding 
the  immense  commerce  which  passed  over  the  flats,  the  total  of 
which  for  the  year  1855,  according  to  a  report  by  Lieutenant-Colonel 
Graham,  of  the  United  States  Topographical  Engineers,  was  over 
four  hundred  millions  of  dollars.  Of  this  vast  sum,  he  says,  "the 
valuation  of  the  articles  which  passed  in  vessels  over  the  St.  Clair 
flats,  in  shipments  to  and  from  Chicago  alone,  in  the  year  1855, 
amounted  to  $113,700,248.89."  The  amount  of  duties  collected 
at  the  Chicago  Custom  House  in  1854  was  $575,802.85.  Even  when 
Congress  made  an  appropriation  of  $45,000  for  improvement  of  the 
St.  Clair  flats,  as  it  did  on  the  5th  of  May,  1856,  President  Pierce 
vetoed  it.  The  bill  received  a  sufficient  majority  in  Congress, 
however,  to  become  a  law  notwithstanding  the  President's  veto. 

The  following  table  of  the  amount  of  corn  in  store  in  Chicago 
June  25,  1856,  is  given  because  it  is  believed  to  furnish  a  complete 
list  (except  the  G.  &  C.  U.  R.  R.  Elevator)  of  the  grain  warehouses 
of  the  city  at  that  time,  the  total  capacity  of  which  was  about 
3,500,000  bushels : 

Capacity 

Sturges,  Buckingham  &  Co 129,620  bu.         700,000 

Walker,  Bronson  &  Co 13,000     "  75,000 

James  Peck  &  Co 21,100    "  60,000 

Fletcher  &  Wilson 5,000    " 

S.  B.  Pomeroy  &  Co 40,000     " 

Fish  &  Lester 6,600    " 

S.  A.  Ford  &  Co 22,000    "  100,000 

Munn  &  Willard 19,300    "'  200,000 

Flint  &  Wheeler 15,000     " 

T.  W.  Alexander  &  Co 45,883     "  700,000 

Gibbs  &  Griffin... 93,132     "  500,000 

Munger  &  Armour 109,737     "  300,000 

Burlingame    22,100     "  100,000 

Total. . , .542,472  bu. 


{1856]  OF  THE  CITY  OF  CHICAGO  219 

The  following  item  which  appeared  in  the  "Democratic  Press," 
August  14,  1856,  speaks  well  for  the  increasing  interest  in  the  daily 
meetings,  and  the  frequent  reports  of  large  sales  "on  'Change" 
indicate  that  the  Board  of  Trade  had  assumed  the  character  of  a 
real  Exchange,  which  it  had  not  possessed  in  its  earlier  years :  "The 
increased  attendance  on  'Change  every  morning,  with  the  growth 
of  the  business  and  commerce  of  the  city,  make  it  very  evident  that 
a  much  larger  room  must  be  secured  for  next  season  than  the  one 
at  present  occupied.  That  is  now  so  crowded  that  on  a  warm  day 
respiration  is  by  no  means  easy  or  satisfactory."  It  seems  that  there 
was  some  question  about  the  lease  of  the  room  in  George  Steele's 
building,  which  had  been  announced  in  the  newspapers,  and  another 
location  said  to  be  central  and  convenient  was  suggested,  "especially 
for  lumbermen  who  are  now  generally  members  of  the  Board  of 
Trade." 

About  this  time  the  advocacy  of  a  new  building  for  the  Board 
•of  Trade  shows  the  increased  interest  felt  in  that  organization.  It 
reads :  "Chicago  merchants  and  business  men  would  as  soon  have 
given  up  the  use  of  the  telegraph  the  second  year  of  its  extension, 
as  to  think  of  getting  along  now  without  their  daily  assembling 
on  'Change  *  *  *  if  the  project  (new  building)  was  com- 
menced in  earnest  at  once,  long  enough  before  it  is  finished,  no 
building  at  present  planned  in  the  city  will  alTord  suitable  accommo- 
dations for  the  daily  meetings  of  the  Board  of  Trade." 

The  following  table  of  the  commerce  of  the  principal  ports  on 
the  Great  Lakes  appeared  August  26,  1856,  and  is  interesting  now: 

Buffalo    $303,023,000 

Chicago    223,878,000 

Cleveland    162,185,640 

Detroit    140,000,000 

Milwaukee    35,000,000 

Maumee  (Toledo)    94,107,000 

Sandusky    59,966,000 

Oswego    146,235,000 

Oswego,  which  was  still  a  strong  competitor  with  Bufifalo  for 
the  grain  trade  of  the  West,  was,  of  course,  dependent  upon  the 
Welland  Canal,  and  it  will  be  observed  that  the  influence  of  Bufifalo 
merchants  was  always  antagonistic  to  the  construction  of  a  canal 
around  Niagara  Falls  on  the  American  side,  which  was  advocated 
by  the  Western  shippers. 

Considerable  work  was  done  during  the  year  1856  in  widening 
and  straightening  the  main  river,  some  of  it  between  La  Salle  and 
Franklin  streets ;  but  the  most  important  accomplishment  was  the 
excavation  and  removal  of  a  part  of  Fort  Dearborn,  so  as  to  give 
the  river  an  additional  width  of  150  feet  below  the  Lake  House  ferry. 


220  HISTORY  OF  THE  BOARD  OF  TRADE  [1856) 

The  schooner  "Dean  Richmond,"  379  tons  register,  with  14,000 
bushels  of  wheat,  including  a  part  of  her  cargo  loaded  at  Milwaukee, 
sailed  from  Chicago  from  Liverpool  July  18,  1856.  The  targo  con- 
sisted of  5,000  bushels  Illinois  winter  wheat  and  9,060  bushels 
Milwaukee  spring  wheat.  A  large  number  of  members  of  the  Board 
of  Trade  went  out  of  the  river  with  her,  returning  on  the  tug  which 
towed  her  into  the  lake.  The  eastern  marine  insurance  companies 
were  averse  to  insuring  the  vessel  and  her  cargo,  and  members  of 
the  Board  of  Trade  undertook  to  secure  individual  sul^criptions 
to  an  underwriting  syndicate.  The  "Dean  Richmond"  had  a  favor- 
able run  down  the  lakes,  passed  through  the  Welland  Canal,  Lake 
Ontario,  and  the  St.  Lawrence  River  without  mishap,  sailed  from 
Montreal,  August  15,  from  Quebec  a  week  later,  and  arrived  in 
Liverpool  on  the  17th  of  September.  The  voyage,  including  a  deten- 
tion of  twelve  days  in  the  St.  Lawrence  River,  consumed  sixty  days, 
and  as  the  financial  results  of  the  experiment  were  reported  satis- 
factory, newspapers  on  both  sides  of  the  Atlantic  enlarged  upon 
the  "revolution"  which  (J^ect  trade  between  the  interior  of  the 
American  continent  and  the  consumers  of  Great  Britain  would  at 
once  inaugurate.  It  was  reported  that  the  cargo  of  the  "Dean 
Richmond"  had  been  sold  at  an  advance  of  68  cents  a  bushel  on  its 
cost  in  Chicago,  and  that  the  vessel  which  cost  $19,000  in  Chicago 
had  brought  $27,000  in  Liverpool.  One  of  the  heavy  produce  dealers 
of  Liverpool  came  at  once  to  Chicago  with  a  view  of  making  arrange- 
ments for  direct  trade  between  the  two  cities,  and  the  enterprising 
members  of  the  Board  of  Trade  talked  of  sending  other  vessels  in 
the  wake  of  the  "Dean'  Richmond."  Later  advices  from  Liverpool, 
however,  indicated  that  the  price  received  for  the  vessel  was  $13,000 
instead  of  $27,000,  which  changed  the  aspect  of  affairs,  and  the 
"revolution"  in  trade  routes  was  postponed.  Probably  the  small 
size  of  the  Welland  Canal  forbade  the  passage  of  vessels  of  sufficient 
capacity  to  make  the  trade  profitable. 

At  a  meeting  of  the  Board  of  Trade,  held  on  the  20th  of  August, 
the  President  appointed  Thomas  Richmond,  George  Steele,  John  P. 
Chapin,  H.  A.  Tucker,  and  E.  K.  Rogers  a  committee  to  prepare 
plans  for  amendments  to  the  Banking  Law,  the  necessity  for  which 
was  clearly  seen. 

The  semi-annual  meeting  of  the  Board  of  Trade  was  held  at 
their  rooms.  No.  12  Dearborn  street,  October  6,  1856,  at  which  time 
122  new  members  were  admitted.  A  vote  taken  upon  the  question 
of  a  new  location  resulted  in  favor  of  leasing  the  third  story  of 
Steele's  new  building  until  May  1,  1858,  at  the  rate  of  $1,000  per 
annum.  A  committee  of  five  was  appointed  at  this  meeting  to 
select  and  purchase  a  lot,  and  to  form  a  joint  stock  company  for  the 
purpose  of  erecting  a  Merchants'  Exchange  thereon.  Discussion 
as  to  the  proper  grading  of  wheat  resulted  in  the  passage  of  a  resolu- 
tion that  the  standard  grades  should  be  "white"   (winter),  "red" 


[1856]  OF  THE  CITY  OF  CHICAGO  221 

(winter)  and  "spring,"  prime  quality,  and  that  variations  from 
prime  quality  should  be  specified. 

On  the  16th  of  October,  1856,  the  Board  of  Trade  took  posses- 
sion of  its  rooms  in  Steele's  Block,  corner  of  South  Water  and 
La  Salle  streets,  and  for  the  first  time  since  its  organization  the 
members  of  the  Board  appear  to  have  been  satisfied  with  their 
surroundings.  Several  speeches  were  made  by  prominent  members 
of  the  Board,  among  them  Thomas  Richmond,  who  predicted 
that  Chicago  would  be  the  largest  city  on  the  continent,  if  not  on 
the  globe. 

Several  meetings  were  held  and  much  discussion  indulged  in 
relative  to  the  proposed  Merchants'  Exchange,  and,  finally,  on  the 
28th  of  November,  at  a  meeting  of  the  Board  of  Trade  called  to  hear 
the  report  of  the  committee,  that  body  recommended  the  purchase 
of  a  lot  on  the  corner  of  Clark  and  Washington  streets,  180  feet  on 
the  former  by  107  feet  on  Washington.  Indeed,  the  committee 
had  already  purchased  the  lot  for  $180,000  and  had  sufficient  faith 
in  its  value  to  say  that  they  would  keep  it  themselves  if  the  Board 
did  not  want  it.  Plans  for  the  building  had  been  prepared,  which 
was  to  be,  in  the  language  of  the  report,  "a  Merchants'  Exchange, 
and  not  as  is  now  the  case  with  the  Board  of  Trade  Rooms,  a  mere 
Corn  Exchange."  The  Board  of  Trade  approved  the  location  upon 
condition  that  $300,000  worth  of  stock  could  be  sold  by  the  1st  of 
May,  1857;  but  the  stock  would  not  sell  and  the  building  project 
slumbered  for  years. 

Great  interest  was  felt  by  Chicago  grain  merchants  in  the 
improvement  of  navigation  in  the  Illinois  River.  Meetings  were 
held  and  the  Board  of  Trade  was  appealed  to  for  help.  A  company 
was  organized  to  undertake  the  work,  but  people  living  in  the  river 
towns  gave  little  encouragement  to  the  promoters,  perhaps  fearing 
the  flooding  of  lands  adjacent  to  the  river ;  and  gradually,  as  the 
railway  systems  were  extended,  the  Illinois  River  lost  its  importance 
so  far  as  the  commerce  of  Chicago  was  concerned. 

The  Illinois  State  census  of  1855  showed  an  increase  since  1850 
of  more  than  50  per  cent,  the  population  being  reported  by  the 
enumeration  as  1,306,576.  The  newer  States  of  Iowa  and  Wisconsin 
showed  a  still  greater  percentage  of  increase  since  1850,  and  the 
latter  in  1855,  and  the  former  in  1856,  each  claimed  a  population 
of  more  than  half-a-million.  There  was  then  at  the  close  of  1856, 
in  these  three  States,  a  population  approximating  two  and  a  half 
million  people,  a  very  large  majority  of  whom  shipped  their  grain 
and  live  stock  to  Chicago,  and  looked  to  this  city  as  their  financial 
and  commercial  metropolis. 

It  is  no  longer  possible  to  trace  the  successive  steps  in  the 
extension  of  the  network  of  iron  rails  which  soon  bound  every  part 
of  the  Northwest  to  the  growing  city  at  the  head  of  Lake  Michigan. 
Wherever  farmers  raised  a  surplus,  they  demanded  railway  con- 


222  HISTORY  OF  THE  BOARD  OF  TRADE  [1856] 

nection  with  Chicago,  because  that  was  the  best  market  for  their 
produce;  and  when  they  had  crossed  the  Mississippi  in  search 
of  new  homes,  they  demanded  that  access  to  their  market  by  means 
of  the  railroad  bridge  at  Rock  Island,  over  which  the  first  train  ran 
on  the  22nd  of  April,  1856,  should  not  be  denied  them  by  the 
jealousy  of  other  cities  or  by  the  ill  will  of  steamboat  employees 
on  the  great  river  itself.  The  newspapers  of  St.  Louis,  New  Orleans, 
Pittsburgh,  St.  Paul,  and  other  river  towns  were  filled  with  editorials 
demanding  the  removal  of  the  bridge,  or  modifications  with  which 
it  was  physically  impossible  to  comply.  A  long  period  of  dry 
weather  had  almost  suspended  navigation  on  all  the  western  rivers, 
greatly  interfering  with  the  business  of  the  interior  towns,  while 
Chicago's  railroads  were  every  day  adding  to  her  trade  at  the 
expense  of  her  would-be  rivals. 

Small  as  the  stock  of  grain  was  at  the  opening  of  navigation, 
and  large  as  the  shipments  had  been  during  the  summer,  it  was 
announced  on  the  10th  of  September  that  the  storehouses  were  "all 
overflowing,  and  it  is  almost  impossible  to  unload  canal  boats  and 
cars  with  dispatch,  or  in  many  cases  to  unload  them  at  all."  And 
this  was  after  the  completion  of  the  Sturges,  Buckingham  &  Co. 
(Illinois  Central),  T.  W.  Alexander  &  Co.  (Rock  Island),  and 
Galena  elevators  had  added  nearly  two  million  bushels  to  the  grain 
storage  facilities  of  the  city  since  the  close  of  the  preceding  winter. 
The  destruction  of  S.  B.  Pomeroy  &  Co.'s  elevator  by  fire  on  the 
14th  of  September,  which  might  have  interfered  with  the  movement 
of  grain  at  an  earlier  day,  had  no  appreciable  effect. 

The  trend  of  prices  in  the  grain  market  during  the  year  1856 
was  downward,  and  during  the  last  two  or  three  months  of  the  year 
this  tendency  was  very  marked.  Local  and  temporary  conditions 
arrested  the  decline  at  frequent  intervals,  but  the  final  result  showed 
a  decline  of  nearly  one-half  in  the  price  of  spring  wheat,  and  almost 
as  much  in  the  price  of  corn.  The  rye  market  followed  the  down- 
ward course  of  wheat  and  corn,  but  oats  maintained  former  prices 
better  than  other  grains,  because  of  a  diminished  supply.  Barley 
is  always  in  a  class  by  itself,  and  the  reason  given  for  its  comparative 
firmness  in  the  face  of  declining  markets  for  other  grains,  was  "the 
growing  popularity  of  lager  beer."  A  short  crop  of  hogs  made  pork 
products  take  an  independent  course,  and  the  substantial  advance 
in  provisions  which  took  place  in  the  summer  and  early  fall  made 
the  year  a  successful  one  for  the  packers  of  Chicago,  although  their 
output  was  a  little  less  than  the  preceding  season.  The  wheat  crop 
in  the  region  tributary  to  Chicago  was  a  good  one  in  1856,  partially 
compensating  the  farmers  for  the  great  decline  in  price.  Corn,  on 
the  other  hand,  sufifered  from  the  drouth,  and  the  price  was  not 
sufficient  to  console  the  grower  for  the  loss  of  a  considerable  part 
of  his  normal  yield. 

The  grain  business  of  Chicago  as  a  whole  showed  an  increase 


[1856]  OF  THE  CITY  OF  CHICAGO  223 

of  20  per  cent,  over  the  preceding  year,  corn  furnishing  most  of  the 
excess,  while  fewer  oats  arrived  than  in  1855.  Although  Milwaukee 
still  claimed  to  be  the  largest  primary  wheat  and  flour  shipping 
point  in  the  world,  and  was  a  worthy  contestant  with  Chicago  for 
this  distinction,  the  flood  of  other  grains  which  poured  through 
the  latter  city  on  its  way  to  tidewater  left  the  ambitious  Wisconsin 
town  far  in  the  rear  as  a  primary  grain  mart.  As  to  St.  Louis,  its 
6,895,029  bushels  received  in  1856  ("Democratic  Press,"  January  5, 
1857),  was  less  than  one-third  the  amount  received  in  Chicago  the 
same  year. 

The  following  table  shows  the  receipts  of  grain  in  Chicago  in 
1856  and  the  two  preceding  years : 

Bushels 

Wheat  8,767,760 

Corn 11,888,398 

Oats 2,219,897 

Rye    45,707 

Barley   128,457 

Total 23,050,219 

Flour  (equivalent  to) 1,624,605 

Total  receipts  in  1856 24,674,824 

Total  receipts  in  1855 20,487,953 

Total  receipts  in  1854 15,804,423 

The  number  of  cattle  slaughtered  in  1856  was  only  14,977,  not 
much  more  than  one-half  the  packing  of  the  previous  year,  and  the 
smallest  business  since  1850;  33,058  barrels  were  put  up,  and  the 
value  of  all  the  beef  products,  including  hides,  tallow,  etc.,  was 
estimated  at  $603,112.72.  The  packing  season  of  1856-7  marked 
the  beginning  of  the  end  of  small  packing  points,  and  the  concen- 
tration of  the  industry  at  the  great  centers. 

The  interior  towns  complained  that  improved  transportation 
facilities  drew  the  hogs  to  Chicago  and  other  large  points.  This 
was  true,  but  even  in  Chicago  the  number  packed  showed  a  slight 
decrease  and  is  given  as  74,000,  compared  with  80,380  the  previous 
season.  The  estimated  number  killed  for  city  consumption  was 
43,628.  Total  receipts  are  stated  officially  as  220,702,  of  which 
174,144  were  live  hogs  and  46,558  were  dressed  hogs.  Total  ship- 
ments of  live  and  dressed  hogs  are  reported  as  103,074,  and  it  was 
estimated  that  about  100,000  were  received  and  shipped  during  the 
interval  between  packing  seasons  which  are  not  included  in  these 
official  figures.  Prices  were  high  during  the  season,  dressed  hogs 
selling  in  the  middle  of  November  at  $5.25@5.50,  and  advancing 
to  $8.50  by  the  end  of  February.  As  the  latter  figure  was  approached, 
most  of  the  Chicago  packers  withdrew  from  the  market. 


224  HISTORY  OF  THE  BOARD  OF  TRADE  [1856] 

The  following  firms  were  engaged  in  the  packing  business  at 
this  time :  Cragin  &  Co.,  O.  S.  Hough  &  Co.,  Hubbard,  Hunt  &  Co., 
George  Steele  &  Co.,  B.  &  G.  B.  Carpenter,  Fabian  &  Milward, 
Stewart  &  Co.,  A.  Brown  &  Co.,  Moore  &  Seaverns. 

While  the  number  of  live  hogs  increased  slightly,  receipts  of 
dressed  hogs  were  less  than  one-third  of  the  number  received  in 
the  packing  season  of  the  previous  year.  The  figures  were,  for 
1855-56,  146,499 ;  for  1856-57,  46,558. 

The  following  table  gives  the  prices  of  spring  wheat,  corn,  oats, 
and  mess  pork,  on  the  first  day  of  each  month  in  the  year  1856: 

Spring  Corn 

Wheat.  for  60  lbs.  Oats.  Mess  Pork. 

January  $1.30@1.35               50c  26@30c  $16.00 

February    1.28@1.30  40@42c  29@30c  $14.00@14.50 

March    1.00@1.05              40c  26@27c  13.75@14.00 

April    1.15@1.20  40@41c  24@25c  14.00@14.50 

May   1.12@1.14  36@37c  25@26c  15.50@16.00 

June  1.05@1.06  32@33c  27@28c  16.00@17.00 

July    1.00  40@41c  25@26c  18.00 

August    1.08@1.10             45c  30@31c  20.00@21.00 

September    98c  37@38c  30@31c  19.00@20.00 

October  1.02@1.03  38@39c  26@27c  20.00@21.00 

November 77@78c  30@31c  25@26c  19.00@20.00 

December   77@78c  35@36c  32@33c  14.00@1S.00 

The  first  charters  were  made  in  April  at  10@10>4  cents  on 
wheat  to  Buffalo,  but  this  rate  could  not  be  maintained,  and  before 
the  end  of  May  corn  was  taken  at  4  cents  to  Buffalo.  In  June,  July, 
and  until  the  last  week  in  August  the  prevailing  rate  was  3  cents 
or  less.  The  last  of  August  6  cents  was  paid  ;  in  September,  11  cents  ; 
in  October,  22  cents,  and  in  November  26  cents  was  paid  on  a  cargo 
of  wheat  to  Buffalo,  while  propellers  asked  28,  and  the  owner  of  a 
small  lot  of  corn  agreed  to  give  one-half  of  it  for  delivery  of  the 
other  half  in  Buffalo.  Just  before  the  close  of  navigation  rates  fell 
to  10@15  cents.  These  extreme  rates  are  explained  by  the  fact  that 
Chicago  elevators  held  1,500,000  of  grain  of  all  kinds  on  the  3rd  of 
November. 

Erie  Canal  freights  from  Buffalo  to  New  York  opened  in  May  at 
14@15  cents  on  corn  and  did  not  vary  materially  from  these  figures 
until  August  when  11>4  was  quoted.  In  the  latter  part  of  September 
Idyi  was  paid  and  in  October  and  November  18  cents  on  corn  and 
23  cents  on  wheat.  It  is  noteworthy  that  when  freight  on  corn  by 
sail  to  Buffalo  was  at  the  highest,  say  22  cents,  Erie  Canal  freights 
were  about  18  cents  ;  in  other  words,  it  cost  40  cents  to  send  a  bushel 
of  corn  from  Chicago  to  New  York,  the  corn  being  worth  at  the  time 
about  30  cents  in  Chicago. 


[1857]  OF  THE  CITY  OF  CHICAGO  225 

Lumber. 

There  was  another  amazing  increase  in  the  volume  of  the 
lumber  trade,  receipts  being  456,673,169  square  feet,  and  shipments 
253,387,732  square  feet.  Chicago's  market  for  lumber  was  west  and 
southwest,  wherever  the  canal  or  rails  furnished  transportation, 
and  farmers  raised  grain  or  stock. 

The  following  newspaper  clipping  gives  an  idea  of  local  con- 
ditions in  Chicago  at  the  close  of  the  year,  and  an  insight  into 
methods  of  trade  as  well : 

"There  is  as  yet  but  little  looking  forward  to  the  season  of 
navigation,  and  consequently  no  transactions  cosummated  for  future 
delivery,  reaching  into  the  spring  or  summer.  In  this  respect  the 
season  is  unlike  the  last  and  several  immediately  preceding,  when 
at  this  period  the  corn  which  was  expected  to  pass  this  port  before 
June  had  probably  all  changed  hands  once  or  twice  by  prospective 
contracts."    ("Democratic  Press,"  December  31,  1856.) 

1857 

Great  indignation  was  aroused  in  Board  of  Trade  circles  in 
the  late  winter  of  1856-7  by  the  introduction  in  the  legislature  of 
New  York  of  a  bill  making  tolls  on  the  New  York  Canals  from 
Oswego,  Rome  and  Whitehall  to  Albany,  the  same  as  on  the  Erie 
Canal  from  Buffalo  to  Albany.  The  object  of  this  proposed  legis- 
lation was  to  compel  western  shippers  to  discontinue  the  use  of 
the  Welland  Canal  and  the  port  of  Oswego,  and  to  send  all  their 
produce,  destined  for  the  seaboard,  via  Buffalo  and  the  Erie  Canal. 
The  injustice  of  this  measure  lay  in  the  fact  that  the  distance  from 
Oswego  to  Albany  is  209  miles  only,  as  against  365  miles  from 
Buffalo  to  Albany. 

As  already  shown,  Buffalo  had  at  this  time  about  twice  as 
much  of  the  western  trade  as  Oswego,  but  her  merchants  wanted 
more,  and  this  measure  would  have  given  them  a  monopoly.  Chi- 
cago shippers  were  in  no  mood  to  submit  to  this  unreasonable  dis- 
crimination without  protest,  and  at  a  meeting  held  on  the  28th  of 
February,  1857,  a  series  of  vigorous  resolutions  were  passed,  broadly 
intimating  that  such  unjust  discrimination  would  force  the  grain' 
trade  of  the  west  into  other  channels,  and  that  the  St.  Lawrence 
River  in  the  summer,  and  the  Mississippi  River  in  the  winter  might 
be  expected  to  attract  the  greater  part  of  the  grain  movement  in 
the  future. 

The  representatives  of  Oswego,  whose  business  would  have 
been  ruined  by  the  proposed  discrimination,  made  an  able  argument 
in  opposition  to  the  measure,  the  New  York  Chamber  of  Com- 
merce registered  an  emphatic  protest  against  it,  and  the  scheme 
failed. 

A  committee  of  five  was  appointed  to  confer  with  the  Chamber 


226  HISTORY  OF  THE  BOARD  OF  TRADE  [1857] 

of  Commerce  of  St.  Louis  "in  reference  to  improvement  of  the 
Illinois  River  under  the  recent  charter  obtained  for  that  purpose." 
Why  the  people  of  Peoria  or  other  river  towns  should  violently 
oppose  the  improvement  of  navigation  on  the  Illinois  River  is  as 
difficult  of  comprehension  to  us  now  as  it  was  at  the  time  to  the 
merchants  of  Chicago.  Nevertheless  public  meetings  were  held 
to  denounce  the  project  as  one  which  threatened  an  "odious,  un- 
limited and  unnatural  monopoly,"  and  it  was  asserted  that  if  the 
promoters  should  "succeed  in  smuggling  a  bill  through  Congress, 
the  Illinois  Valley  will  flame  with  indignation  against  the  men  who 
have  dared  to  steal  our  natural  rights." 

The  Chamber  of  Commerce  of  St.  Louis,  on  the  other  hand, 
endorsed  the  proposed  improvement  as  presented  by  the  able  com- 
mittee from  Chicago,  but  wished  to  have  a  report  from  the  engineers 
before  committing  themselves  further.  The  Illinois  River  Improve- 
ment Committee,  organized  under  its  charter  in  March,  1857,  with 
William  F.  Thornton  as  president ;  but  before  anything  of  impor- 
tance was  done  the  money  stringency  came  on  and  the  project  was 
abandoned. 

Among  the  canal  projects  which  were  bidding  for  support  at 
this  time  was  the  proposed  Rondeau  Ship  Canal  (37  miles  long) 
from  Lake  Huron  to  Lake  Erie,  designed  to  obviate  the  delays  and 
dangers  attendant  upon  navigation  over  the  St.  Clair  flats.  At  a 
meeting  of  the  Board  of  Trade,  held  March  16,  1857,  a  committee 
appointed  at  a  previous  meeting,  reported  favorably  upon  the 
scheme  and  the  Board  recommended  "the  speedy  commencement 
of  this  important  enterprise,  pledging  its  members  to  sustain  it, 
if  made  to  meet  the  commercial  needs  of  the  Lakes."  Very  wisely, 
they  urged  that  the  proposed  canal  should  be  of  sufficient  capacity 
for  the  future,  as  well  as  for  the  present  wants  of  the  lake  commerce. 
The  necessary  depth  of  water  was  estimated  at  14  feet.  Charles 
Walker,  George  Steel,  and  Col.  B.  S.  Sheppard  were  appointed  Pro- 
visional Trustees  on  the  part  of  the  Board  of  Trade  to  take  steps 
for  the  speedy  commencement  and  completion  of  the  canal.  Simi- 
lar action  had  already  been  taken  by  the  Cleveland  Board  of 
Trade. 

Further  investigation  developed  the  fact  that  the  canal  would 
cost  much  more  than  its  early  advocates  had  calculated,  and  more 
than  its  advantages  warranted,  and,  like  many  other  schemes 
from  which  great  results  were  anticipated,  it  gradually  was  for- 
gotten. 

Another  project  in  which  much  interest  was  felt  was  a  pro- 
posed canal  across  the  State  of  Michigan,  first  suggested  by  William 
B.  Ogden,  one  of  the  original  incorporators  of  the  Board  of  Trade, 
and  first  mayor  of  Chicago.  (Democratic  Press,  March  7,  1857). 
Mr.  Ogden's  high  position  as  a  man  of  affairs  gave  to  this  scheme 
a  temporary  standing  not  warranted  by  its  intrinsic  merit. 


[1857]  OF  THE  CITY  OF  CHICAGO  227 

The  ninth  annual  meeting  of  the  Board  of  Trade  was  held  on 
the  6th  day  of  April,  1857.     The  following  officers  were  chosen : 

Charles  H.  Walker,  President  (re-elected). 

George  W.  Noble,  Vice-President. 

W.  W.  Mitchell,  Secretary  and  Treasurer. 

Directors :  George  Steel,  George  Armour,  E.  W.  Griffin,  James 
L.  Allen,  Tarlton  Jones,  D.  R.  Holt,  James  Peck,  C.  L.  Bissell,  I.  D. 
Harmon,  E.  I.  Tinkham. 

The  Secretary  reported  gross  receipts  for  the  year  $2,085.00, 
and  expenditures  $1,960.70.  The  Auditing  Committee  reported  a 
balance  on  hand  of  $24.30. 

The  President  and  Secretary  were  authorized  to  employ  a 
superintendent  at  a  salary  not  exceeding  $1,500.00  per  annum,  whose 
special  duty  it  should  be  to  collect  and  compile  the  statistics  of  the 
Board.  No  efi'ort  in  this  direction  had  been  made  by  the  Board 
prior  to  this  time,  but  the  yearly  pamphlet  of  the  "Democratic 
Press"  had  furnished  the  most  reliable  data  hitherto,  and  its  figures 
have  been  generally  accepted  by  historians  as  the  nearest  approx- 
imation to  the  truth.  At  this  meeting  it  was  resolved  that  tele- 
graphic dispatches  from  New  York,  Buffalo  and  Oswego  should 
be  obtained  and  posted  on  the  bulletin  in  the  Board  of  Trade  rooms. 
A  committee  was  appointed  to  confer  with  a  committee  of  the  newly 
organized  Merchants'  Exchange  in  regard  to  a  new  building.  The 
dues  for  the  ensuing  year  were  fixed  at  ten  dollars.  The  by-laws 
were  also  amended  so  that  one  admission  fee  of  ten  dollars  should 
cover  all  the  members  of  a  firm. 

S.  B.  Pomeroy,  chairman  of  a  committee  previously  appointed 
to  act  on  the  subject  of  inspectors,  weighers,  etc.,  reported  in  favor 
of  adopting  the  St.  Louis  or  Boston  standard  of  flour  (or  some 
other  equally  high).  The  committee  also  recommended  "the  ap- 
pointment of  grain  inspectors  whose  duty  shall  be  to  grade  prop- 
erly all  the  wheat  and  corn  of  car  grain  in  conformity  to  a  standard 
to  be  furnished  by  this  Board."  The  committee  also  recommended 
the  establishment  of  three  grades  of  spring  wheat,  to  be  known  as 
"Club  Spring,"  "No.  1  Spring,"  which  was  to  be  the  standard,  and 
"No.  2  Spring,"  (and  they  further  recommended  that,  if  possible, 
the  inspection  system  should  be  regulated  exclusively  by  the  Board 
of  Trade,  without  city  or  state  supervision,  so  that  there  might  be 
no  political  interference  therewith.  The  report  was  accepted  and 
laid  on  the  table. 

During  the  month  of  June  the  recommendations  of  the  Inspec- 
tion Committee  were  again  taken  up  by  a  meeting  of  the  Board 
of  Trade  and,  with  some  amendments,  adopted. 

Weighers  were  to  be  employed  by  warehousemen  at  their  own 
expense  and  selected  by  them  with  approval  of  the  standing  com- 
mittee of  the  Board  of  Trade;  inspectors  were  to  be  appointed  as 
provided  in  the  recommendations,  and  the  charge   for  inspection 


228  HISTORY  OF  THE  BOARD  OF  TRADE  [1857] 

was  to  be  ten  cents  per  car,  and  twenty-five  cents  for  each  (canal) 
boat.  To  the  grades  of  spring  wheat  recommended  by  the  com- 
mittee and  the  grades  of  winter  wheat  adopted  in  1856,  were  added 
three  grades  of  barley,  "Prime  Barley"  to  be  the  standard.  It  was 
provided  that  this  important  inspection  rule  should  go  into  effect 
July  1,  1857.     (Democratic  Press,  June  23,  1857). 

There  was  much  dissatisfaction  with  the  grading  of  wheat  and 
on  the  11th  of  July  the  committee  reported  to  the  full  Board  rec- 
ommending five  grades  of  wheat,  "No.  1  White,"  "No.  1  Red,"  "No. 
1  Spring,"  "No.  2  Spring"  and  "Refuse." 

They  further  recommended  that  other  grains  should  be  graded, 
as  follows: 

Com 

No.  1 — To  be  sound,  good  berry,  and  well  cleaned. 
No.  2 — To  be  sound,  but  not  clean  enough  for  No.  1. 
Rejected — Unsound  or  very  dirty. 

Oats 

No.  1 — To  be  clean  and  sound. 

Rejected — Unsound,  and  too  dirty  for  No.  1. 

Barley 

No.  1 — The  berry  to  be  plump,  well  cleaned  and  sound. 

No.  2. — To  be  sound  and  clean. 

No.  3 — To  be  sound,  but  not  clean  enough  for  above  grades. 

Rejected — To  be  unsound,  dirty  and  unfit  for  merchantable  pur- 
poses. 

Finally  on  the  24th  of  August,  after  much  wrangling,  the 
Board  of  Trade  decided  upon  the  following  grades  of  wheat  and 
the  requirements  for  each : 

No.  1  White  Wheat — The  berry  to  be  plump,  well  cleaned,  and 
free  from  rye. 

No.  1  Red  Wheat — The  berry  to  be  plump  and  well  cleaned, 
and  may  comprise  such  qualities  of  White  Wheat  as  are  not  up 
to  the  standard  of  No.  1  White,  but  equal  in  value  to  No.  1  Red. 

No.  2  Red  Wheat — -All  qualities  of  winter  wheat  that  are  not 
equal  to  the  standard  of  No.  1  Red,  but  equal  in  value  to  extra 
Spring. 

No.  1  Spring  Wheat — The  berry  must  be  plump  and  well 
cleaned  and  may  comprise  such  qualities  of  White  and  Red  Wheat 
as  are  not  equal  to  the  standard  of  No.  1  Red,  but  equal  in  value 
to  No.  1  Spring. 

No.  2  Spring  Wheat — All  sound  wheat  not  equal  in  value  to 
No.  1  Spring,  to  be  placed  in  No.  2  Spring  Wheat. 

Refuse  Wheat — All  unsound,  or  any  that  is  too  dirty,  to  go 
into  any  of  the  aforementioned  grades. 


[1857]  OF  THE  CITY  OF  CHICAGO  229 

The  organization  of  the  "New  York  Warehousing  Company" 
under  a  charter  granted  by  the  New  York  Legislature  at  its  last 
session  is  noted  in  the  Chicago  newspapers  as  the  first  practical 
step  towards  abolition  of  the  aggravating  annoyances  to  which 
western  grain  shippers  have  been  subjected  in  the  New  York  mar- 
ket. This  company  proposed  to  construct  in  New  York  immense 
grain  warehouses  similar  to  those  in  Chicago,  and  to  receive  and 
deliver  grain  by  weight  as  desired  by  the  western  shipper.  (Dem- 
ocratic Press,  May  19,  1857.)  It  was  claimed  too  that  the  provi- 
sions of  the  charter  under  which  this  company  was  organized,  per- 
mitted regulations  which  would  give  to  its  warehouse  receipts  a 
negotiable  value  which  such  receipts  had  not  before  possessed  under 
the  laws  of  the  State  of  New  York. 

There  were  at  this  time  a  large  number  of  steamboats  plying 
between  Chicago  and  Buffalo,  Oswego,  and  other  ports  on  the 
lower  lakes.  The  Democratic  Press  of  April  20,  1857,  enumerates 
56  propellers  belonging  to  the  following  lines  making  regular  trips 
to  Chicago : 

American  Transportation  Co 8 

People's  Lines 5 

Western  Transportation  Co 10 

Northwestern  Transportation  Co 8 

Northern  Transportation  Co 11 

N.  Y.  Central  Line 8 

Old  Oswego  Line 6 

Total  number  of  propellers 56 

In  addition  to  these  American  lines,  a  Canadian  line  of  pro- 
pellers began  making  trips  between  Montreal  and  Chicago,  via  Wel- 
land  Canal,  during  the  latter  part  of  May,  1857,  and  in  June  a  dele- 
gation from  Toronto  visited  the  Board  of  Trade  to  advocate  the 
establishment  of  a  line  of  propellers  to  run  between  Chicago  and 
Collingwood,  the  successful  inauguration  of  which  in  the  following 
spring  will  be  mentioned  later. 

On  the  14th  of  July,  1857,  the  Board  of  Trade  was  called  to 
order  by  President  Walker  to  take  appropriate  action  in  relation 
to  the  arrival  of  the  British  schooner  "Madeira  Pet,"  which  had 
just  come  to  anchor  in  the  Chicago  River  with  the  first  cargo  of 
merchandise  ever  received  at  this  port  direct  from  Liverpool.  Reso- 
lutions were  adopted  congratulating  the  captain  and  owners  of  the 
cargo  (which  consisted  of  glassware,  crockery,  paint,  hardware, 
etc.)  upon  the  success  of  their  voyage,  and  their  demonstration  that 
direct  trade  with  Europe  was  practicable.  A  committee  was  ap- 
pointed to  procure  a  tug  and  bring  the  vessel  to  her  dock  at  the 
foot  of  LaSalle  Street,  where  she  was  received  with  cheers  from 
the  crowd  which  had  assembled  to  greet  her.    Owing  to  unforeseen 


230  HISTORY  OF  THE  BOARD  OF  TRADE  [1857] 

delays  at  the  Welland  Canal  and  adverse  winds  on  the  lakes,  her 
voyage  from  Liverpool  to  Chicago  consumed  80  days.  The  schooner 
registered  only  123  tons,  but  she  carried  a  cargo  of  about  240  tons, 
and  drew  nine  feet  of  water.  In  the  evening  a  salute  of  100  guns 
was  fired  in  honor  of  the  event. 

The  "Madeira  Pet"  sailed  for  Liverpool  upon  her  return  voyage 
with  a  small  cargo  of  hides  on  the  5th  of  August,  and  her  departure 
was  made  the  occasion  of  a  jubilee  by  members  of  the  Board  of 
Trade,  many  of  whom  accompanied  her  to  the  lake.  Small  as 
she  was,  she  was  unable  to  carry  a  full  cargo  through  the  Welland 
Canal,  and  this  fact  explains  the  reason  why  "direct  trade"  with 
Europe  in  grain,  from  which  such  great  results  were  anticipated, 
failed  to  attain  the  importance  which  the  demonstration  of  its  "prac- 
\ticability"  seemed  to  warrant.  Vessels  of  sufficient  capacity  to 
make  direct  trade  in  grain  really  profitable  could  not  pass  through 
/the  Welland  Canal.  And  yet  the  experiment  inaugurated  by  the 
/Dean  Richmond  was  sufficiently  successful  to  induce  C.  J.  Kershaw 
of  Chicago  and  others  to  build  two  vessels  for  the  Liverpool  trade 
during  the  summer  and  autumn  of  1857.  Both  of  them  were  built 
in  a  Cleveland  shipyard,  the  first  one,  the  bark  or  barkantine,  C.  J. 
Kershaw,  sailing  in  July  with  a  cargo  of  staves  and  black  walnut 
lumber,  and  arriving  in  Liverpool  on  the  5th  of  September.  She 
had  a  successful  voyage  financially  and  otherwise,  and  brought  a 
return  cargo  as  far  as  Toronto,  where  she  was  frozen  in  about  the 
middle  of  December.  It  is  interesting  to  note  in  this  connection 
that  a  Montreal  committee  which  investigated  the  feasibility  of 
running  a  line  of  propellers  between  that  city  and  Chicago  decided 
that  it  would  not  be  profitable  unless  upbound  freight  could  be  ob- 
tained which  would  pay  a  higher  rate  of  freight  than  salt.  (Dem- 
ocratic Press,  February  21).  Several  cargoes  of  white  oak  staves 
and  black  walnut  lumber,  however,  went  from  the  lakes  to  Great 
Britain  in  the  following  year,  and  apparently  with  better  results 
to  owners  than  they  could  have  realized  from  the  shipment  of  grain. 
The  great  cost  of  handling  lumber  and  staves  made  it  desirable  that 
once  loaded  they  should  reach  their  destination  without  transfer, 
and  this  advantage  enabled  even  vessels  of  250  to  300  tons  to  con- 
tinue the  lumber  and  stave  traffic  while  grain  cargoes  of  this  size 
could  not  follow  the  same  route  and  successfully  compete  with 
those  which  went  to  Liverpool  via  the  Erie  Canal  and  the  port  of 
New  York. 

It  is  stated  by  most  financial  writers  that  the  panic  of  1857 
began  with  the  failure  of  the  Ohio  Life  Insurance  and  Trust  Com- 
pany in  August  of  that  year.  This  is  true  so  far  as  the  New  York 
banks  were  concerned,  and  the  suspension  of  specie  payments  which 
soon  followed.  But  general  distrust  had  existed  in  financial  circles 
for  months.  Failures  had  been  numerous,  money  was  tight,  east- 
ern banks  were  calling  in  their  loans,  the  rampant  speculation  in 


[1857]  OF  THE  CITY  OF  CHICAGO  231 

which  the  whole  country  had  indulged  received  a  sudden  check, 
specie  was  exported  to  settle  an  unfavorable  trade  balance,  and  some 
important  railway  lines  defaulted  on  their  bonded  indebtedness 
before  the  Ohio  Life  Insurance  and  Trust  Company  closed  its  doors. 
It  was  apparent  that  something  was  wrong  with  the  business  of 
the  country.  Eastern  financial  authorities  diagnosed  the  trouble  as 
western  speculation,  while  some  of  the  Chicago  papers  stoutly 
maintained  that  the  West  was  so  sound  that  a  financial  revulsion 
was  impossible  and  that  its  condition  had  been  misrepresented  by 
some  of  the  grain  speculators  on  the  Board  of  Trade. 

The  previous  winter  was  long  and  cold,  and  in  April  Walker 
Bronson  &  Co.,  a  leading  Chicago  grain  house,  issued  a  circular  in 
which  they  asserted  that  their  canvass  of  the  region  tributary  to 
Chicago  indicated  a  practical  exhaustion  of  supplies,  not  more  than 
two  million  bushels  of  grain  of  all  kinds  remaining  in  the  hands  of 
farmers  and  dealers.  The  receipts  of  grain  at  Chicago  before  any 
movement  of  the  new  crop  demonstrated  the  gross  inaccuracy  of 
Walker  Bronson  &  Co.'s  estimate,  but  it  had  been  extensively  quoted 
in  the  East  as  evidence  of  the  bankrupt  condition  of  the  West,  while 
the  exceedingly  backward  spring  lent  color  to  the  predictions  of 
approaching  crop  disaster,  which  were  industriously  circulated  by 
the  "bull"  speculators  in  the  grain  market. 

Since  early  summer  a  strong  and  unscrupulous  "bear"  party 
aided  by  the  New  York  Herald  had  been  successfully  raiding  the 
New  York  stock  market,  causing  immense  losses  to  holders  of  rail- 
way shares,  and  at  length  producing  a  condition  of  distrust  border- 
ing on  panic,  and  only  needing  some  big  failure  to  start  the  gen- 
eral scramble. 

William  B.  Ogden,  President  of  the  Chicago,  St.  Paul  and  Fond 
du  lac  Railroad  Company,  was  easily  the  leading  citizen  of  Chicago 
in  wealth  and  influence ;  and  when  announcement  was  made,  on 
the  21st  of  August,  that  the  obligations  of  this  company  had  gone 
to  protest  in  New  York,  and  when  it  was  rumored  that  Mr.  Ogden, 
who  was  known  to  have  endorsed  much  of  the  paper  of  this  railroad, 
had  also  failed,  the  seriousness  of  the  situation  forced  itself  upon 
the  mind  of  every  business  man  in  Chicago.  On  the  24th  the  Ohio 
Life  Insurance  and  Trust  Company  closed  its  doors  and  the  panic 
was  on.  After  the  first  few  days  of  senseless  fear  things  became 
more  quiet,  only  to  suffer  a  fresh  outbreak  a  few  weeks  later,  and 
on  the  13th  of  October  specie  payment  was  suspended  by  the  New 
York  City  banks  after  fifteen  of  their  number  had  failed  in  a  single 
day.  A  curious  development  of  the  monetary  stringency  was  the 
formation  of  the  Merchants'  Grain  Forwarding  Association  by  the 
wholesale  merchants  of  the  city,  independently  of  the  Board  of 
Trade.  The  merchants  disavowed  any  intention  of  interfering  with 
the  regular  grain  business  of  the  City,  asserting  that  their  only 
object  was  to  escape  an  exorbitant  charge  for  Eastern  exchange. 


232  HISTORY  OF  THE  BOARD  OF  TRADE  [1857] 

As  might  have  been  expected,  the  organization  was  too  unwieldy 
to  act  effectively,  but  considerable  business  was  done  by  individual 
merchants  with  their  country  correspondents  and  with  farmers. 

The  grain  business  was  seriously  hampered  by  the  stringency 
in  the  money  market  in  the  East  as  well  as  in  the  West.  In  some 
instances  firms  with  large  quantities  of  grain  on  the  Erie  Canal 
were  unable  to  raise  money  to  pay  the  tolls,  and  canal  boats  cleared 
from  one  local  point  to  another  and  waited  for  shippers  to  get  money 
enough  together  to  pay  for  another  move  of  a  few  miles.  (Demo- 
cratic Press,  October  1,  1857.) 

If  the  panic  of  1857  was,  as  charged  by  one  of  the  Chicago  pa- 
pers, "a  newspaper  panic,"  caused  by  "successful  attacks  upon  the 
public  credit  by  a  set  of  desperate  speculators,"  aided  by  the  New 
York  Herald,  it  was  a  shining  example  of  the  power  of  the  press 
for  evil.  One  of  the  most  depressing  incidents  of  the  later  panic 
was  the  assignment  of  the  Illinois  Central  Railroad  Company  on 
the  12th  of  October.  The  New  York  and  Erie  failed  the  same 
day,  and  before  the  end  of  October  the  Philadelphia  &  Reading, 
Delaware,  Lackawanna  &  Western,  and  many  other  Eastern  roads 
failed,  as  well  as  the  Michigan  Central  and  Michigan  Southern  in 
the  West. 

Notwithstanding  all  the  obstacles  which  interfered  with  the 
grain  trade  of  Chicago,  the  Democratic  Press  of  October  28th  could 
truthfully  say  that  "The  grain  trade  continues  to  be  the  center 
of  the  largest  and  healthiest  activity  of  the  city,  but  one  which,  from 
its  vital  character,  makes  its  strong  pulsation  felt  through  the  whole 
frame  of  our  commerce." 

Eastern  bankers  and  newspapers  were  clamoring  for  a  larger 
movement  of  grain,  while  farmers  who  were  able  to  hold  their 
wheat  and  corn  were  not  anxious  sellers  at  the  terrible  decline 
brought  about  by  the  panic.  Some  of  the  more  radical  Eastern 
journals  advocated  a  total  suspension  of  credit  to  western  mer- 
chants, an  unnecessary  precaution,  it  would  seem,  as  money  was 
worth  2@3  per  cent  a  month  in  New  York,  and  1>^@2  per  cent  in 
Boston.     In  Chicago  the  ruling  rate  was  3@5  per  cent  per  month. 

Meantime  the  financial  troubles  in  America  and  other  causes 
produced  a  similar  crisis  in  Europe,  and  the  Bank  of  England  raised 
its  discount  rate  to  the  unheard  of  height  of  10  per  cent  per  annum, 
and  Paris,  Vienna,  Hamburg,  Amsterdam  and  Brussels  followed 
the  lead  of  London.  Even  this  advance  in  the  rate  of  discount  did 
not  stop  the  demand  for  money,  and  in  November  the  British  Gov- 
ernment, to  save  the  Bank  of  England  from  disaster,  was  compelled 
to  authorize  it  to  issue  notes  to  any  amount  necessary  without  the 
specie  reserve  required  by  law.  This  was  a  practical,  although  not 
a  technical,  suspension  of  specie  payments. 

The  New  York  banks  accumulated  gold  rapidly  after  their  sus- 
pension, and  notwithstanding  the  European  stringency,  money  was 


[1857]  OF  THE  CITY  OF  CHICAGO  233 

easy  in  that  city  before  the  close  of  November  at  7  per  cent  per 
annum ;  and  on  the  12th  of  December  formal  resumption  of  specie 
payments  was  announced.  In  fact,  the  New  York  banks  had  prac- 
tically resumed  on  the  first  of  the  month.  To  this  result  the  con- 
stant influx  of  gold  from  California  greatly  contributed,  as  well 
as  the  demand  from  Western  Europe,  where  the  potato  crop  failed, 
for  the  abundant  yield  of  wheat  with  which  the  United  States  had 
been  favored.     The  western  corn  crop,  too,  was  a  good  one. 

The  semi-annual  meeting  of  the  Board  of  Trade  was  held  on 
the  5th  of  October,  1857.  A  resolution  was  passed  endorsing  the 
Welland  Railway  and  commending  the  project  to  the  pecuniary 
support  of  the  people  of  Chicago.  A  committee  was  appointed  to 
compile  and  republish  the  Constitution  of  the  Board  with  its  vari- 
ous amendments.  Later  in  the  month  the  Board  passed  a  long 
preamble,  and  resolutions  again  urging  upon  Congress  the  appro- 
priation of  public  lands  in  aid  of  the  Niagara  Ship  Canal,  asking 
the  President  to  notice  the  subject  in  his  next  annual  message  and 
requesting  the  Senators  and  Representatives  from  Illinois  to  vote 
for  such  a  bill  and  to  use  all  honorable  means  to  obtain  the  passage 
of  the  same. 

At  the  beginning  of  the  year  1857  there  was  nothing  to  indi- 
cate the  probability  of  unusual  fluctuations  in  the  grain  and  provi- 
sion markets  of  Chicago.  Pork  was  high,  and  wheat,  corn  and  oats 
were  bringing  moderate  but  fairly  remunerative  prices.  The  ad- 
vance in  produce  of  all  kinds  during  the  late  spring  and  early  sum- 
mer, based  upon  a  supposed  scarcity  of  supplies  (which  did  not 
exist),  and  upon  a  predicted  crop  failure,  which  did  not  materialize, 
has  already  been  alluded  to.  So  has  the  great  decline  in  prices  re- 
sulting from  the  panic,  and  from  the  favorable  crop  outlook  which 
became  manifest  in  midsummer.  The  falling  oflf  in  the  grain  busi- 
ness of  the  city,  after  three  years  of  amazing  increase,  was  much 
less  than  might  have  been  expected,  and  resulted  more  from  the 
unwillingness  of  farmers  to  market  their  supplies  at  current  rates 
after  the  money  stringency  became  acute  than  from  inability  of 
Chicago  dealers  to  find  money  with  which  to  pay  for  the  produce 
and  forward  it  to  the  seaboard,  difficult  as  this  was,  at  times. 

That  Chicago  grain  merchants  were  in  no  way  instrumental 
in  delaying  the  movement  of  crops  to  the  seaboard  is  shown  by 
the  fact  that  on  the  25th  of  November,  just  before  the  close  of  nav- 
igation, the  entire  stock  of  grain  in  all  the  elevators  of  the  city  was 
as  follows: 

Wheat    136,806  bushels 

Corn    8,637 

Oats  4.683 

Rye   1,321 

Barley   12,881 

164,328 


234 


HISTORY  OF  THE  BOARD  OF  TRADE 


[1857] 


As  the  new  Illinois  Central  Railroad  elevator  had  been  com- 
pleted during  the  year  and  the  storage  capacity  of  the  city  thereby 
increased  to  4,095,000  bushels,  it  will  be  seen  that  only  four  per 
cent  of  the  available  space  was  occupied  at  the  date  mentioned. 

Total  receipts  of  grain  for  the  year  (including  the  flour  equiv- 
alent) were  21,856,206  bushels  against  24,674,824  bushels  in  1856, 
as  shown  in  the  following  table : 

Total  Receipts  of  Flour  and  Grain  for  Two  Years 

—1856—  —1857— 


Wheat   bushels     8,767,760 


Corn    , 

Oats    

Rye  

Barley   

Flour  (equal  to) . 


11,888,398 

2,219,897 

45,707 

128,457 

1,624,605 


10,554,761 

7,409,130 

1,707,245 

87,711 

127,689 

1,969,670 


24,674,824        21,856,206 
Total  Shipments  of  Flour  and  Grain  for  Two  Years 


Wheat    bushels 

Corn   

Oats    

Rye 

Barley    

Flour  (equal  to) 


—1856— 

8,337,420 

11,129,668 

1,014,547 

590 

19,051 

1,081,945 


—1857— 

9,485,052 

6,814,615 

416,778 

17,993 
1,298,240 


21,583,221         18,032,678 

While  there  was  a  decrease  in  the  total  movement,  it  will  be 
observed  that  this  falling  off  was  only  in  corn  and  oats,  while  the 
movement  of  wheat  and  flour  showed  a  fair  increase. 

Lake  Transportation 

Lake  freights  were  low  during  the  whole  season  of  1857.  The 
earliest  charters,  after  the  opening  of  navigation,  were  at  4  cents 
for  corn  to  Buffalo,  and  this  was  the  highest  rate  until  the  latter 
part  of  July,  when  4^^  cents  was  paid  for  a  few  loads.  Most  of 
the  grain  during  May,  June  and  July  was  carried  at  2@3  cents 
for  corn  and  this  rate  prevailed,  with  one  or  two  exceptions,  until 
about  the  1st  of  November,  when  higher  rates  were  paid,  5  cents 
the  maximum  for  corn  to  Buffalo  being  paid  towards  the  close 
of  navigation. 

Canal  Freights 

Erie  Canal  freights  were  moderately  low  at  the  opening  of 
the  season,  10^@11^  cents  being  the  earliest  rates  paid  on  corn 


£1857]  OF  THE  CITY  OF  CHICAGO  235 

from  Buffalo  to  New  York.  In  the  latter  part  of  June,  10  cents, 
and  in  July  as  low  as  8  cents  was  quoted;  in  August  9j^@ll  cents 
was  the  range ;  10  to  12  cents  in  September  and  October,  and  12@ 
15  cents  as  the  close  of  navigation  approached  in  November. 

Although  the  transportation  of  perishable  freight  from  the 
West  to  the  East  did  not  develop  into  a  business  of  magnitude 
for  several  years,  as  will  be  related  hereafter,  the  following  extract 
from  the  Scientific  American  of  the  7th  of  November,  1857,  is  of 
interest,  as  the  crude  beginning  of  a  vast  traffic : 

"For  some  months  past  considerable  quantities  of  farm  produce 
and  other  perishable  substances  have  been  brought  to  this  city 
from  remote  parts  by  means  of  a  new  description  of  rail  car,  fitted 
up  on  the  principle  of  a  refrigerator.  Fresh  meats  and  poultry  have 
been  brought  from  the  western  States  to  New  York  City  during  the 
extreme  heat  of  the  summer  months  with  complete  success.  By 
one  arrival,  fifteen  hundred  turkeys,  chickens,  geese,  etc.,  and  180 
carcasses  of  mutton  were  delivered  in  this  city  in  as  good  condition 
as  when  first  placed  in  the  car,  in  which  they  had  remained  nineteen 
days."     (Democratic  Press,  November  9,  1857.) 

Beef  Packing. 

As  might  be  expected,  the  financial  stringency  interfered  with 
packing  operations  at  all  the  Western  centers.  Probably  Chicago 
packers  were  inconvenienced  as  little  as  any,  although  they  had 
contracted  before  the  panic  for  a  good  share  of  the  cattle  needed 
for  the  season,  and  at  prices  above  current  values  at  the  time  of 
delivery,  as  they  had  been  looking  forward  to  an  increase  of  100 
per  cent  in  the  business  of  the  previous  year.  As  it  was,  Chicago 
packers  slaughtered  19,127  head  of  cattle  (Cragin  &  Co.  leading 
with  9,230  head),  and  more  than  25,000  were  shipped  on  the  hoof  to 
Eastern  markets.  Most  of  the  cattle  contracted  before  the 
panic  cost  the  packers  $3@3.25.  Later  purchases  were  made  at 
$2@2.25. 

A  new  stock  yards  was  opened  by  the  Michigan  Southern,  Rock 
Island,  and  Chicago  &  St.  Louis  Railroads,  or  an  old  one  enlarged 
at  the  corner  of  Clark  and  Twenty-second  Streets,  and  prices  real- 
ized at  this  live  stock  market,  as  well  as  at  the  "Sherman"  or  Myrick 
yards  on  the  Lake  Shore,  were  quoted  with  some  regularity  in  the 
daily  papers. 

Pork  Packing 

Although  the  pork-packing  season  of  1857-8  began  later  than 
usual  and  prices  were  much  depressed,  a  large  business  was  done 
before  the  season  closed  in  March,  final  figures  of  the  number  of 
hogs  slaughtered  in  Chicago  being  99,262.  Cragin  &  Co.  head  the 
list  of  packers  with  21,021,  closely  followed  by  Thomas  Nash  &  Co., 
■with  20,782.     (Democratic   Press   Review,    1858.)     Total  receipts 


236  HISTORY  OF  THE  BOARD  OF  TRADE  [1857] 

during  the  packing  season,  however,  were  less  than  in  the  preceding 
year  and  shipments  of  live  and  dressed  hogs  fell  off  correspondingly. 
The  average  weight  of  hogs  slaughtered  was  the  same  as  in  the 
previous  season,  about  230  pounds. 

One  of  the  principal  reasons  for  the  rapid  growth  of  the  grain 
trade  in  Chicago  during  the  first  decade  of  the  existence  of  the 
Board  of  Trade  was  the  fact  that  almost  from  the  time  of  the  first 
arrivals  by  canal  and  railroad  Chicago  warehouses  were  forced  to 
find  a  method  of  handling  grain  in  bulk  and  by  machinery,  and  that 
by  this  method  and  by  their  system  of  weighing  instead  of  measur- 
ing, they  reduced  the  terminal  charges  to  about  one-quarter  of 
what  the  grain  would  have  to  stand  if  consigned  to  St.  Louis  or 
other  markets  where  the  antiquated  system  of  sacking  prevailed. 
In  other  words,  the  terminal  charges  at  St.  Louis,  including  the  ex- 
pense of  sacks,  amounted  to  seven  or  eight  cents  a  bushel,  against 
about  two  cents  at  Chicago. 

Lumber 

Notwithstanding  all  the  difficulties  which  confronted  the  lum- 
bermen in  1857  the  receipts  for  the  year  actually  increased  nearly 
three  million  square  feet  over  the  enormous  receipts  of  the  previous 
year  as  shown  below : 

Receipts  of  lumber  in  1857 459,639,198  sq.  ft. 

Receipts  of  lumber  in  1856 456,673,169  sq.  ft. 

Licrease  2,966,029  sq.  ft. 

As  in  former  years,  nearly  all  this  vast  quantity  came  by  lake 
vessels,  except  some  fifteen  million  feet  of  hardwood  lumber  brought 
from  Michigan  and  Indiana  by  the  Michigan  Southern  and  Michigan 
Central  Railroads. 

At  a  meeting  of  the  lumbermen  held  at  the  Board  of  Trade 
rooms  on  the  22d  of  December  standard  grades  and  rules  for  the 
guidance  of  inspectors  were  adopted.  All  lumbermen  who  were 
not  members  of  the  Board  of  Trade  were  recommended  to  join  the 
organization,  but  it  was  intimated  that  in  the  spring  a  separate 
Board  of  Lumbermen  would  be  formed. 

The  winter  tariff  on  grain  and  provisions  all-rail  to  New  York 
was  announced  early  in  December  as  $1  per  hundred  pounds  on 
dressed  hogs  and  90  cents  per  hundred  pounds  on  barreled  pork  and 
beef. 

The  year  was  an  unprofitable  one  for  the  Lake  marine,  but 
arrivals  at  the  port  of  Chicago,  compared  with   1856,  as  follows: 

Total  arrivals  in  1857,  7,557  vessels,  1,753,413  tons 
Total  arrivals  in  1856,  7,328  vessels,  1,545,379  tons 


£1858] 


OF  THE  CITY  OF  CHICAGO 


237 


The  Lake  Tonnage  of  the  District  of  Chicago  also  increased, 
as  follows: 

Steam  Sail 

December  31,  1856. ..  .4,421  tons         54,295  tons 
December  31,  1857.... 7,954      "  62,727      " 


Increase 


.3,533 


8,432 


The  Railroads 

Owing  to  the  monetary  crisis  there  was  little  addition  to  the 
mileage  of  Chicago  railway  systems  in  1857.  The  total  at  the  close 
of  the  year  was  3,953  miles,  an  increase  of  277  miles  only,  and  most 
of  this  was  in  Iowa.     (Democratic  Press,  March  19,  1858.) 

The  following  table  shows  prices  of  spring  wheat,  corn,  oats 
and  mess  pork  in  the  Chicago  market  on  the  first  day  of  each  month 
in  the  year  1857: 

Spring 

1857             Wheat              Corn  Oats  Mess  Pork 

Jan $0.85@  .87  38  @39c  33@35c  $17.00@18.00 

Feb .90  41  @43c  33@36c  19.00@21.00 

March 90@  .91  40  @42c  38@39c  21.00@22.00 

April 84@  .88  36  @37c  36@38c  22.00@23.00 

May   1.06@1.10  57i^@60c                 53c  21.00@21.75 

June    1.21@1.25  71  @72i^c  65@66c  23.00@23.50 

July   1.26@1.27  65  @66c  56@58c  23.00@23.50 

August  1.12@1.14  67  @68c  56@57c  23.50@24.00 

Sept 92@  .96  68  @69c  28@29c  24.00@25.00 

Oct 7Z@.  .77  49  @50c  26@28c  24.00@25.00 

Nov 68@  .69  45  @46c  24@25c  19.00@20.00 

Dec 53@  .54  42  @45c  25@26c  14.00@15.00 

This  table  shows  pretty  well  the  fluctuations  in  prices  of  the 
principal  commodities  dealt  in  on  the  Board  of  Trade,  although 
wheat  reached  its  highest  point  on  the  7th  of  July  at  $1.30,  corn 
during  the  last  days  of  May  at  75@76c,  and  oats  about  the  same 
time  at  66@68c.  Practical  exhaustion  of  the  stock  of  mess  pork 
early  in  September  enabled  those  who  held  a  few  barrels  to  keep 
this  article  from  going  down  the  toboggan  with  everything  else 
after  the  panic  set  in.  It  continued  to  decline  after  the  first  of  De- 
cember, and  before  the  month  closed  was  selling  at  $12.50@13.00 
per  barrel. 

1858 

Whatever  America's  share  of  responsibility  for  the  European 
financial  crisis  may  have  been,  the  New  York  banks  were  in  position 
by  the  first  of  December  to  export  gold,  and  before  the  first  of  Jan- 


238  HISTORY  OF  THE  BOARD  OF  TRADE  [18581 

uary,  1858,  ten  million  dollars  left  the  ports  of  New  York  and  Bos- 
ton for  London  in  partial  liquidation  of  American  indebtedness. 
The  suspension  of  the  charter  provision  requiring  the  Bank  of 
England  to  maintain  a  specie  reserve  for  all  its  bank  notes  had 
brought  the  panic  in  Great  Britain  to  an  end,  and  with  the  further 
relief  afforded  by  heavy  shipments  of  American  and  Australian 
gold,  English  financial  afifairs  soon  righted  themselves,  and  the  dis- 
count rate  fell  to  4  per  cent  before  the  first  of  February. 

During  the  winter  and  spring  of  1857-1858  sales  of  corn  were 
made,  for  the  most  part,  with  the  specification  "60  pounds"  per 
bushel,  notwithstanding  the  statutory  weight  of  a  bushel  of  corn 
was  56  pounds. 

The  Board  of  Lumbermen  further  defined  the  grades  of  lum- 
ber and  revised  the  rules  for  the  guidance  of  inspectors  at  a  meet- 
ing held  in  the  Board  of  Trade  rooms  on  the  15th  of  January. 

In  the  early  days  of  American  railroading  wood  was  the  fuel 
in  universal  use,  and  it  is  worthy  of  note  that  in  the  winter  of  1857-8 
Griggs'  patent  coal  burner  for  locomotives  was  enough  of  a  novelty 
to  justify  frequent  newspaper  reference  to  its  introduction  on  some 
of  the  Eastern  railways.  The  Illinois  Central  had  already  found 
coal  a  cheaper  fuel  than  wood,  and  before  the  close  of  the  year 
had  eighteen  coal-burning  locomotives  in  use. 

'The  long-expected  report  of  Kivas  Tully,  engineer  of  the  pro- 
posed Georgian  Bay  Ship  Canal  was  published  early  in  February. 
He  estimated  the  cost  of  the  work  by  the  Lake  Simcoe  route,  which 
he  considered  the  most  available  one,  as  $22,000,000.00,  a  sum  far 
in  excess  of  the  guesses  of  some  of  its  ardent  supporters.  A  few 
days  later  the  Board  of  Trade  adopted  resolutions  "commending 
the  subject,"  expressing  the  belief  that  the  proposed  canal  would 
have  an  abundance  of  business  as  soon  as  completed,  promising  ta 
co-operate  with  our  "Canadian  neighbors,"  and  asking  the  citizens 
of  Chicago  to  contribute  towards  Col.  Mason's  fee  as  consulting 
engineer.  At  a  meeting  held  on  the  22nd  of  February,  1858,  the 
Board  of  Trade  adopted  a  memorial  to  Congress,  setting  forth  the 
dilapidated  condition  of  the  harbor  improvement,  the  vast  extent  of 
the  commerce  of  Chicago,  and  asking  for  an  appropriation  "suffi- 
cient to  make  the  harbor  permanently  safe  and  accessible."  Hon. 
J.  F.  Farnsworth,  a  Chicago  member  of  Congress,  was  requested 
to  use  his  best  efiforts  to  secure  this  appropriation,  and  also  asked 
to  procure  the  building  of  a  new  lighthouse  in  a  more  favorable  loca- 
tion than  the  old  one.  A  bill  appropriating  $100,000.00  for  improve- 
ment of  the  Chicago  Harbor  was  introduced,  but  Congress  failed  to 
act  favorably  upon  it,  as  usual.  On  the  first  of  March,  1858,  the 
Board  of  Trade  was  visited  by  Hon.  Mr.  Christie  of  Niagara,  Can- 
ada, who  submitted  a  memorial  to  the  Legislative  Council  of  the 
Province  of  Canada,  petitioning  that  body  to  enlarge  the  Welland 
Canal  without  delay.     He  asked  for  the  endorsement  of  the  Board, 


[1858]  OF  THE  CITY  OF  CHICAGO  239 

and  requested  that  the  members  sign  the  memorial,  and  his  wishes 
were  complied  with. 

On  the  18th  of  March  the  Chicago  &  Joliet  railroad  was  fin- 
ished, and  the  Chicago,  Alton  &  St.  Louis  thereby  secured  a  direct 
air  line  (nearly)  to  St.  Louis.  The  pork  packing  of  the  West  for 
the  season  of  1857-8,  as  compiled  by  the  Cincinnati  Price  Current, 
exceeded  the  previous  year  about  fifteen  per  cent  in  number  of 
hogs,  and  the  increase  of  average  weight  was  equal  to  about  5 
per  cent  additional,  or  say  20  per  cent  in  all.  Most  of  the  packing 
was  done  after  the  middle  of  December  and  the  season  closed  much 
later  than  usual.  All  the  large  packing  centers  showed  increases 
while  the  small  points  fell  behind  in  number  of  hogs  packed.  More 
hogs  were  slaughtered  on  the  farms,  owing  to  the  financial  strin- 
gency in  the  early  part  of  the  season. 

The  following  are  the  figures  given  by  this  recognized  authority 
for  packing  of  the  West  for  the  season  1857-8 :  Ohio,  599,787  ;  Ken- 
tucky, 357,510;  Indiana,  423,956;  Illinois,  435,411 ;  Missouri,  173,636; 
Iowa,  86,603;  Wisconsin,  16,000;  Tennessee,  37,875.  Total,  2,130,- 
778.    Total  in  1856-7,  1,852,479.     Increase,  278,299. 

Navigation  opened  very  early  in  the  spring  of  1858,  the  winter 
having  been  a  mild  one.  The  movement  of  wheat  during  the  winter 
had  been  of  fair  volume,  but  receipts  of  corn  had  barely  sufficed  for 
local  consumption,  and  on  the  27th  of  March  the  elevators  were  not 
half  full.  The  report  showed  in  store  on  that  date:  Wheat,  1,537,- 
025;  corn,  22,022;  oats,  99,963;  rye,  2,988;  barley,  55,888. 

There  were  vessels  in  the  harbor  with  a  carrying  capacity  of 
about  a  million  bushels.  The  Upper  Mississippi  River  opened  about 
the  25th  of  March,  and  on  the  1st  of  April  the  first  of  the  grain-laden 
fleet  sailed  from  Chicago  for  the  lower  lakes. 

The  tenth  annual  meeting  of  the  Board  of  Trade  was  held  at 
their  rooms,  corner  of  La  Salle  and  South  Water  Street,  on  Monday, 
April  6th,  1858.  Twenty-eight  new  members  were  elected  and  offi- 
cers for  the  ensuing  year  were  chosen  as  follows :  Julian  S.  Rumsey, 
President ;  Thomas  Beebe,  Vice-President ;  W.  W;  Mitchell,  Secre- 
tary and  Treasurer. 

The  following  were  elected  directors :  R.  M.  Mitchell,  H.  K. 
Elkins,  I.  Y.  Munn,  George  Armour,  N.  Ludington,  J.  Magill,  B.  F. 
Culver,  C.  T.  Wheeler,  D.  Kreigh,  M.  C.  Stearns. 

The  report  of  the  Secretary-Treasurer  showed  a  balance  on 
hand  of  $956.75. 

A  resolution  was  adopted  directing  the  President  and  Secre- 
tary to  prepare  and  forward  to  the  State  Legislature  a  petition  ask- 
ing for  such  an  amendment  of  the  law  under  which  the  Board  was 
organized  as  would  permit  the  Board  to  control  the  appoint- 
ment of  certain  inspectors,  measures  and  weighers,  and  to  exact 
from  such  appointees  bonds  for  the  faithful  performance  of  their 
duties. 


240  HISTORY  OF  THE  BOARD  OF  TRADE  [1858] 

At  an  adjourned  meeting  held  a  week  later  a  motion  was  car- 
ried abolishing  all  fines  for  non-attendance  in  future.  A  committee 
was  appointed  to  draw  up  a  new  Charter  and  Constitution ;  and  a 
proposition  made  at  the  annual  meeting  restricting  membership  in 
the  Board  of  Trade  to  those  residing  in  Chicago  and  having  an 
office  in  the  city  was  carried  after  considerable  discussion.  The 
subject  of  the  appointment  of  a  superintendent  was  referred  back 
to  the  Directors  with  power  to  act.  Twenty  new  names  were  added 
to  the  roll  of  membership  at  this  meeting.  A  few  days  later  Mr. 
P.  L.  Wells  resigned  the  position  of  Superintendent,  and  the  Direc- 
tors appointed  Seth  Catlin  to  succeed  him.  ^ 

On  the  20th  of  April  a  meeting  of  vessel  owners  and  agents 
was  held  at  the  Board  of  Trade  rooms  and  a  combination  effected 
which  pledged  the  "Board  of  Vessel  Brokers,"  as  the  organization 
was  named,  to  adhere  to  the  following  schedule  of  rates :  Wheat  to 
Buffalo,  8  cents  per  bu. ;  to  Oswego,  12  cents.  Corn  to  Buffalo,  7 
cents  per  bu. ;  to  Oswego,  lOj/2  cents.  Oats  to  Buffalo,  5  cents  per 
bu. ;  to  Oswego,  8  cents.  Only  one  vigorous  protest  against  this 
action  was  made.  Solomon  Sturges  offered  the  following  as  a  sub- 
stitute for  the  long  report  of  the  Committee  favoring  the  organiza- 
tion of  the  "Vessel  Trust,"  as  the  combination  would  be  called  in 
modern  days,  but  his  amendment  was  voted  down : 

"Resolved,  That,  in  the  opinion  of  this  Association,  all  combi- 
nations to  influence  the  prices  of  grain,  freights  of  vessels,  or  prices 
of  labor  are  contrary  to  sound  moral  law,  if  not  the  laws  of  God,  and 
that  we  will  not  sustain  such." 

The  combination  soon  went  to  pieces,  and  two  or  three  days 
later  it  was  reported  from  Milwaukee  that  "parties  in  Chicago  who 
have  resolved  not  to  accept  less  than  8  cents  to  Buffalo  are  tele- 
graphing up  here  offering  their  vessels  at  current  rates."  At  the 
opening  of  navigation  the  Chicago-CollingAvood  line  of  propellers 
began  to  make  tri-weekly  trips  between  those  ports,  the  propeller 
Ontonagan  of  this  line  sailing  from  Chicago  as  soon  as  ice  had 
disappeared  from  the  Straits  of  Mackinac. 

The  river  towns,  led  by  St.  Louis,  continued  the  agitation  for 
the  removal  of  the  Rock  Island  Railroad  bridge,  on  the  ground  that 
it  was  dangerous  to  navigation,  and  in  May  a  committee  of  the 
House  of  Representatives  at  Washington  reported  favorably  a  bill 
for  this  purpose.  Whether  or  not,  sectional  prejudice  inspired  the 
committee,  as  charged  by  the  "Press,"  cannot  be  known ;  but  the 
bill  failed  to  pass.  Later  in  the  year  Judge  Lowe  issued  a  temporary 
injunction,  restraining  the  bridge  company  from  making  necessary 
repairs  to  the  bridge,  but  refused  to  make  the  injunction  permanent. 
An  attempt  to  burn  the  bridge  was  made  about  the  first  of  October. 
Most  of  the  money  for  the  war  on  the  bridge  was  contributed  by 
the  St.  Louis  Chamber  of  Commerce,  which  announced  in  Novem- 
ber that  they  had  $5,000  in  hand  for  this  purpose,  and  tried  unsuc- 


[1858]  OF  THE  CITY  OF  CHICAGO  241 

cessfully  to  induce  the  City  Council  of  St.  Louis  to  appropriate  an 
equal  sum  towards  the  fund  of  $12,000.00  which  they  estimated 
would  be  sufficient  to  accomplish  their  purpose. 

Public  interest  in  commercial  circles  was  aroused  by  the  an- 
nouncement that  the  practicability  of  using  steam  as  a  motive  power 
for  canal  boats  had  just  been  "demonstrated"  by  a  steam  canal 
boat  which  ascended  the  Erie  Canal  from  Rochester  to  Buffalo  at 
a  speed  of  nearly  four  miles  an  hour  against  the  current  without 
causing  noticeable  damage  to  the  banks  of  the  canal  itself.  The 
"practicability"  of  steam  propulsion  of  canal  boats  was  demon- 
strated several  years  before  the  Erie  Canal  people  discovered  it. 
Two  canal  propellers  to  ply  on  the  Illinois  and  Michigan  Canal 
were  built  by  Houghteling  and  Shepherd  in  1853,  and  were  used 
successfully  in  the  Chicago-St.  Louis  trade  until  low  water  in  the 
Illinois  River  made  transportation  at  any  attainable  rate  ruinous 
to  all  engaged  in  it.  Mention  has  already  been  made  of  the  steam 
canal  boat  Chief  Engineer  which  was  in  use  in  the  summer  of  1850. 

Shortly  after  the  New  York  Canal  authorities  became  con- 
vinced of  the  feasibility  of  using  canal  propellers  they  issued  regu- 
lations limiting  the  speed  of  such  boats  to  six  miles  per  hour  when 
drawing  four  feet  of  water,  and  five  miles  when  drawing  more 
than  four  feet ;  also  giving  them  preference  at  locks  over  other  boats 
upon  condition  of  their  paying  double  toll  on  the  propeller  boat, 
and  on  one  boat  in  tow,  if  such  there  were. 

"Direct  trade"  with  Europe  still  caught  the  popular  fancy,  and 
about  the  middle  of  June  the  newspapers  enumerated  ten  American 
lake  sailing  vessels  which  had  cleared  or  were  about  to  clear  for 
Great  Britain,  most  of  them  loaded  with  oak  staves  or  black  walnut 
lumber  from  eastern  Michigan  or  northern  Ohio,  and  only  one  so 
far  as  known,  the  "Correspondent,"  carrying  grain.  One  vessel, 
the  schooner  "Harvester,"  took  lumber  to  Hamburg,  Germany. 
The  ocean  fleet,  or  Liverpool  fleet,  as  it  was  called,  returned  during 
September  and  October,  most  of  the  vessels  bringing  back  salt  or 
iron  to  lake  ports. 

Several  meetings  of  the  Board  of  Trade  were  held  to  discuss 
the  question  of  telegraphic  dispatches.  On  the  17th  of  June  the 
Board  voted  to  have  market  reports  from  Oswego,  Buffalo,  Mon- 
treal and  New  York  posted  on  the  bulletin  board  daily  at  noon.  A 
few  weeks  later,  after  much  dissatisfaction  had  been  expressed, 
it  was  voted  to  continue  the  telegrams  from  New  York,  "provided 
the  necessary  funds  can  be  raised  by  subscription."  Five  hundred 
dollars  was  raised  for  this  purpose. 

The  inspection  system  adopted  by  the  Board  of  Trade  in  1856 
and  1857  did  not  work  as  smoothly  as  had  been  hoped,  partly 
because  there  was  no  chief  inspector  and  consequently  no  uniform- 
ity in  grades,  partly  because  some  inspectors  were  lax  in  their  exam- 
inations, if  not  dishonest,  and  partly,  it  would  seem,  because  some 


242  HISTORY  OF  THE  BOARD  OF  TRADE  [1858] 

of  the  warehousemen  did  not  give  the  system  their  support.  The 
result  was  that  "Chicago  spring"  wheat  in  the  New  York  market 
was  5  to  8  cents  per  bushel  below  the  price  of  "Milwaukee  club." 
On  the  24th  of  May,  the  Board  adopted  a  recommendation  of  the 
Directors  that  a  chief  inspector  be  appointed,  and  George  Sitts  was 
unanimously  chosen  for  the  position. 

The  Committee  on  Inspection  succeeded  in  persuading  the 
warehousemen  to  sign  an  agreement  to  do  all  in  their  power  to 
carry  out  the  new  plan,  which  included  a  change  of  the  grades  of 
spring  wheat  into  "Club,"  "No.  1,"  "No.  2"  and  "Rejected."  They 
announced  that  after  June  15  the  inspection  would  be  much  more 
rigid  than  heretofore.  The  action  of  the  Inspection  Committee  was 
approved  by  the  Board,  and  the  members  pledged  their  hearty  sup- 
port. Some  prominent  shippers,  however,  were  opposed  to  the 
system,  and  at  a  special  meeting  of  the  Board  of  Trade  held  on  the 
19th  of  July  an  attempt  was  made  by  certain  shippers  to  discon- 
tinue posting  upon  the  bulletin  board  a  statement  of  the  quantity 
and  grade  of  grain  shipped  from  each  elevator  on  the  previous  day. 
Mr.  Walker's  resolution  to  this  effect  was  opposed  by  Julian  S. 
Rumsey  and  others,  Mr.  Rumsey  protesting  against  it  "in  the  name 
of  all  that  is  honest  and  fair,"  and  asserting  that  it  was  but  the 
entering  wedge  to  break  up  the  new  system  of  wheat  inspection. 
This  system,  he  stated,  had  been  unanimously  adopted  by  the 
Board  of  Trade  to  prevent  fraud — first,  to  prevent  buyers  in  the 
country  from  mixing  wheat  with  screenings,  oats  and  other  sub- 
stances, and  selling  the  compound  as  "spring  wheat" ;  and, 
second,  to  prevent  buyers  in  the  city  from  mixing  cargoes  of  re- 
jected and  No.  1  or  No.  2,  and  selling  them  as  "Chicago  spring 
wheat,"  thus  damaging  the  character  of  our  market.  The  Board 
by  voting  down  Mr.  Walker's  resolution,  reaffirmed  its  determina- 
tion to  uphold  the  inspection  system  and  the  purposes  for  which 
it  was  adopted. 

The  Committee  on  Inspection  certainly  led  a  strenuous  life  in 
1858.  They  barely  had  time  to  congratulate  themselves  on  this 
victory  when  trouble  occurred  in  a  new  quarter,  and  it  was  openly 
charged  that  a  large  amount  of  Chicago  rejected  wheat  had  been 
shipped  to  Beloit,  Wisconsin,  and  thence  via  Racine  to  Milwaukee, 
where  it  was  sold  as  "Milwaukee  Club."  Inquiry  into  this  and 
other  irregularities  developed  a  scandalous  disregard  of  the  letter, 
as  well  as  the  spirit,  of  the  agreement  made  by  certain  warehouse- 
men with  the  Board  of  Trade  Committee  on  Inspection,  and  at  a 
meeting  held  on  the  22nd  of  November  the  Special  Committee  pre- 
viously appointed  made  a  report  giving  in  detail  instances  of  dis- 
honest methods  on  the  part  of  several  warehousemen,  censuring 
these  warehousemen  for  their  acts  and  recommending  further  legis- 
lative control  as  the  proper  remedy  for  the  evil.  What  some  of 
the  crooked  practices  were  may  be  inferred  from  one  of  the  resolu- 


[1858]  OF  THE  CITY  OF  CHICAGO  243 

tions  adopted  by  the  Board  at  a  meeting  held  on  the  14th  of  Decem- 
ber, which  provides  "That  the  Standing  Committee  of  this  Board 
are  hereby  directed  to  prepare  a  new  agreement  and  request  all  the 
proprietors  of  grain  storehouses  in  the  city  to  sign  it,  the  same  to 
bind  them,  in  addition  to  all  that  they  have  already  agreed  to,  to 
recognize  the  present  proposed  test  of  weight  and  change  of  name, 
and  further  not  to  mix  any  grain  received  from  boats  or  teams,  or 
otherwise,  that  has  not  been  inspected,  with  that  which  has,  while 
it  is  in  their  possession  under  any  pretense  whatever,  and  that  they 
will  put  such  grain  as  has  been  inspected  all  of  each  kind  together 
(not  selecting  the  best  and  putting  it  by  itself)  ;  that  they  will  not 
clean,  or  blow  any  grain,  though  it  has  been  inspected,  and  put 
it  with  any  other  grade  without  having  it  inspected.  *  *  * 
Also,  that  the  Standing  Committee  be  directed  to  embody  in 
the  agreement  with  the  proprietors  of  grain  houses,  anything  that 
in  their  opinion  will  promote  open,  straightforward  fair  dealing." 
Another  resolution  provided  "that  the  grade  of  spring  wheat  now 
known  as  No.  2  shall  be  known  as  "Standard." 

"But  perhaps  the  most  important  action  was  the  provision  for 
a  minimum  weight  test  in  the  following  resolution :  "That  in  addi- 
tion to  all  the  requirements  of  the  present  system  of  inspection  the 
test  of  weight  shall  be  added  to  the  requirements  of  spring  wheat, 
so  that :  None  shall  pass  as  club  that  weighs  less  than  60  pounds 
to  the  measured  bushel.  None  shall  pass  as  No.  1  that  weighs  less 
than  56  pounds  to  the  measured  bushel.  None  shall  pass  as  stand- 
ard that  weighs  less  than  50  pounds  to  the  measured  bushel.  None 
shall  pass  as  rejected  that  weighs  less  than  40  pounds  to  the  meas- 
ured bushel."  The  weight  test  and  change  of  name  of  "No.  2" 
spring  wheat  to  "standard"  it  was  resolved  should  take  eflfect 
January  1,  1859.  Later  the  grade  of  "club"  spring  wheat  was  abol- 
ished and  the  grade  No.  2  spring  wheat  revived  to  weigh  between 
45  and  50  pounds  per  bushel.  It  has  been  well  said  of  the  inspec- 
tion and  grading  inaugurated  in  1858  that  "thus  began  the  great 
reform  in  the  handling  of  grain,  which  was  the  basis  of  the  present 
system,  the  perfection  and  reliability  of  which  are  recognized 
throughout  the  world,  wherever  American  wheat  is  bought." 

The  great  event  of  the  year  1858,  and  one  of  the  greatest 
achievements  of  the  nineteenth  century  was  the  successful  laying 
of  the  trans-Atlantic  cable  between  Valencia  Bay  on  the  coast  of 
Ireland  and  Trinity  Bay  on  the  coast  of  Newfoundland.  After 
the  failure  of  several  attempts,  success  crowned  the  enterprise,  and 
the  Chicago  morning  papers  of  August  6  describe  in  superlatives 
the  excitement  caused  by  receipt  of  the  news  on  the  preceding  day. 
There  was  general  rejoicing  in  commercial  circles  in  Chicago  and 
elsewhere  and  a  salute  of  one  hundred  guns  was  fired  on  the  lake 
front  in  honor  of  the  event.  The  Board  of  Trade  on  the  14th 
appointed  a  committee  to  co-operate  with  the  Common  Council  in 


244  HISTORY  OF  THE  BOARD  OF  TRADE  [18S8] 

more  formal  celebration  of  the  wonderful  achievement.  On  the 
16th,  when  Queen  Victoria's  message  to  President  Buchanan  and 
his  reply  flashed  under  the  sea,  the  enthusiasm  knew  no  bounds. 
On  the  following  day  the  Board  of  Trade  sent  a  long  congratulatory 
message  to  Cyrus  W.  Field,  to  whom,  more  than  any  other  indi- 
vidual, belonged  the  honor  of  conducting  the  great  enterprise  to  a 
successful  issue,  and  it  was  unanimously  resolved  that  when  the 
cable  should  be  opened  for  business  the  President  of  the  Board  of 
Trade  should  send  a  congratulatory  message  to  the  Board  of  Trade 
at  Liverpool.  Mr.  Field's  reply  to  the  President  of  the  Board  was 
received  a  few  days  later.  A  description  of  the  "grand  celebra- 
tion" in  the  evening  occupied  three  columns  in  the  "Press"  and 
"Tribune"  of  the  18th,  and  some  of  the  headlines  were  "The  Union 
of  Two  Hemipsheres,"  "Glory  to  Science,"  "60,000  Citizens  in  the 
Streets!"  "Illumination  of  the  Public  Buildings,"  "Bonfires,  Music, 
Fireworks,"  "Grand  Triumphal  Procession,"  etc.  For  several  days 
a  considerable  portion  of  the  space  in  the  daily  press  was  occupied 
by  telegraphic  news  of  celebrations  in  all  parts  of  the  country  and 
by  other  matter  relative  to  the  Atlantic  Telegraph  Line,  Jjut  after 
working  indifferently  for  about  three  weeks  the  cable  ceased  to 
transmit  intelligible  messages^nd  only  the  staunchest  friends  of 
the  enterprise  retained  their  faith  in  its  ultimate  success.  Even  the 
newspapers  seldom  mentioned  it,  and  eight  years  elapsed  before 
a  new  cable  established  permanent  submarine  telegraphic  communi- 
cation between  the  two  continents.  The  arrival  of  the  first  over- 
land mail  from  California  at  St.  Louis  on  the  9th  of  October  was  a 
great  event,  and  was  duly  celebrated  by  the  people  of  that  city. 

Prior  to  1858  all  pork  packing  was  done  in  the  coldest  months 
of  the  year,  and  a  low  out-of-doors  temperature  was  considered 
essential  to  the  proper  preservation  of  the  meats.  Mechanical 
refrigeration  had  not  been  introduced  upon  a  commercial  scale ;  but 
in  the  winter  of  1857-8,  two  Chicago  packing  firms — Van  Brunt  & 
Watrous,  formerly  of  New  York  City,  and  Tobey,  Booth  &  Co. — 
stored  large  quantities  of  ice,  and  in  the  summer  of  1858  successfully 
inaugurated  summer  packing  of  pork  products  in  rooms  artificially 
cooled  by  natural  ice,  the  first  named  firm  packing  25,826  hogs  and 
Tobey,  Booth  &  Co.  11,475.  Van  Brunt  &  Watrous  purchased  and 
occupied  about  the  1st  of  June  the  Milward  packing  house,  said  to 
have  been  the  most  complete  in  the  West. 

Referring  to  summer  packed  pork,  the  New  York  "Corn 
Exchange  Reporter"  of  Sept.  18,  1858,  says:  "The  ice-house  pork 
arriving  from  Chicago  is  of  very  superior  quality,  by  many  pre- 
ferred to  the  old ;  indeed  the  quality  is  equal  to  any  we  have  ever 
seen,  which  renders  the  success  of  this  new  mode  of  curing  meats 
beyond  a  doubt." 

There  may  be  no  public  record  of  the  fact,  but  it  cannot  be 
doubted  that  many  members  of  the  Board  of  Trade  attended  the 


[1858]  OF  THE  CITY  OF  CHICAGO  245 

first  of  the  famous  game  dinners  given  by  the  late  John  B.  Drake. 
It  was  held  at  the  Tremont  House,  of  which  he  was  then  pro- 
prietor, on  the  5th  of  September,  1858,  and  among  the  delicacies 
were: 

Roast — Wild  pigeon,  mallard  ducks,  widgeons,  prairie  chickens, 
wild  geese,  sand-hill  cranes,  wood  ducks,  gray  ducks.  Broiled — 
Squirrels,  marsh  birds,  wild  pigeons,  blue-winged  teal,  woodcock 
with  toast  and  pork,  prairie  chickens,  plover,  reed  birds.  Game  pies 
with  olives,  hashed  grouse  with  poached  eggs,  potted  prairie 
chicken,  squirrel  stewed  and  in  champagne. 

At  the  semi-annual  meeting  of  the  Board  of  Trade,  held  Octo- 
ber 4,  1858,  thirty  new  members  were  elected.  A  committee  of  five 
was  appointed  to  prepare  a  new  charter  and  constitution  for  the 
Board,  and  to  take  measures  to  have  it  passed  at  the  coming  session 
of  the  Legislature.  Permission  was  given  the  firm  of  Lee  &  Arm- 
strong to  sell  stocks  and  bonds  at  auction  in  the  Board  of  Trade 
rooms  after  the  meetings  of  'Change  were  over.  An  effort  was 
made  to  increase  the  rate  of  commissions  for  selling  grain,  from 
one  cent  per  bushel  to  two  and  one-half  cents  on  the  value  of  sales, 
but  it  was  voted  down. 

About  the  first  of  December  the  Pittsburgh,  Ft.  Wayne  & 
Chicago  Railroad  began  to  run  trains  to  Pittsburgh  without  change 
of  cars,  and  on  Christmas  Day  the  first  passenger  train  left  the 
depot  of  that  road  on  the  west  side  of  the  river  for  the  East.  All 
rail  transportation  of  wheat  from  Chicago  to  New  York  appears 
to  have  been  a  novelty  in  1858,  the  "Press"  and  "Tribune"  of  Decem- 
ber 11  speaking  of  it  as  a  new  feature,  which  "has  been  introduced 
into  railroading  recently,  and  is  thought  to  be  of  some  importance." 
"Some  parcels  have  already  gone  forward  and  with  satisfactory 
results."  The  Pittsburgh,  Ft.  Wayne  &  Chicago  Railroad  is  cred- 
ited with  making  the  innovation,  and  all  the  eastern  lines  agreed 
to  charge  the  same  rate  on  wheat  in  bags  or  barrels,  as  on  flour. 
The  rate  from  Chicago  is  not  mentioned,  but  from  Toledo  to  New 
York  it  was  52  cents  per  hundred  pounds. 

Before  the  close  of  the  year,  business  depression  caused  by  the 
panic  of  1857,  was  greatly  relieved  and  money  was  plenty  enough 
in  Eastern  cities  upon  approved  collateral  to  warrant  newspaper 
reference  to  prevailing  conditions  as  a  "money  plethora." 

"The  following  summary  gives  the  number  of  hogs  packed  in 
Chicago  during  the  packing  season  of  1858-9,  and  the  number 
slaughtered  by  each  packing  firm:  R.  M.  &  O.  S.  Hough,  36,000; 
Cragin  &  Co.,  30,014;  Van  Brunt  &  Watrous,  25,454;  Jones  &  Cul- 
bertson,  15,000;  G.  S.  Hubbard  &  Co.,  23,546;  Tobey  &  Booth, 
9,000;  Leland  &  Mixer,  8,300;  Geo.  Steel  &  Co.,  3,581 ;  G.  &  J.  Stew- 
art, 5,139;  J.  G.  Law  &  Co.,  2,500;  P.  Curtis,  2,000;  Burt  &  Higgins, 
1,000;  Holden  &  Priest,  3,000;  Andrew  Brown  &  Co.,  9,000;  sundry 
others,  6,150.    Total,  179,684. 


246  HISTORY  OF  THE  BOARD  OF  TRADE  [1858] 

The  pork  packing  season  of  1858-9  closed  about  a  month  earlier 
than  usual  at  most  of  the  Western  packing-  points,  and  on  the  2nd  of 
February  the  Cincinnati  "Price  Current"  published  its  usual 
Review,  showing  an  increase  in  number  of  hogs  packed  in  the  West 
of  about  10J4  per  cent,  but  a  decrease  in  average  weight,  which 
reduced  the  actual  increase  in  pounds  to  about  3>^  per  cent.  Illinois 
and  Iowa  showed  increases  of  25  and  80  per  cent  respectively,  while 
Indiana  and  Missouri  showed  considerable  loss  in  numbers,  and 
Ohio  only  a  trifling  gain  over  the  preceding  season.  Outside  of 
Chicago  the  only  Illinois  points  among  the  55  reporting,  which 
packed  more  than  30,000  hogs,  were  Alton,  32,600;  Peoria,  45,000; 
Quincy,  49,000,  and  Springfield,  37,000.  The  following  summary 
shows  the  total  packing  by  States  for  1858-9:  Ohio,  624,109;  Ken- 
tucky, 397,117;  Indiana,  407,636;  Illinois,  596,136;  Missouri,  155,774; 
Tennessee,  65,172;  Iowa,  158,217;  Wisconsin,  32,702.  Total, 
2,436,863. 

The  first  annual  report  of  the  Board  of  Trade,  prepared  by  Seth 
Catlin,  superintendent,  is  of  such  interest  that  no  excuse  is  oflfered 
for  the  following  copious  extracts  from  it.  The  tables  are  copied 
without  effort  to  correct  errors  in  addition,  of  which  there  are  sev- 
eral.   The  Secretary  said  in  part : 

"It  is  customary  for  associations  like  the  Board  of  Trade 
of  Chicago  to  present  a  yearly  statement  of  the  business  of  the 
city  where  such  associations  are  maintained.  It  is  not  proposed 
in  this  statement  so  to  do,  but  to  give  an  account  of  the  busi- 
ness of  the  Board  the  past  year,  with  a  summary  of  statistics 
collected. 

"It  appears  from  the  record  the  first  'meeting  of  merchants  and 
business  men'  was  held  March  13,  1848,  when  a  constitution  was 
submitted  and  adopted,  but  it  was  not  until  April  15,  1849,  that  an 
act  of  incorporation  was  in  force,  which  was  adopted  by  the  Board 
organized  May  2,  1850.  Although  few  similar  institutions  in  the 
country  number  more  members,  or  transact  more  business  'on 
'Change'  than  the  'Chicago  Board  of  Trade,'  no  yearly  report  has 
ever  been  published  of  its  proceedings. 

"From  the  meagre  accounts  heretofore  kept  by  the  Board, 
very  little  can  be  gathered,  and  in  order  to  make  comparisons 
between  the  business  of  this  and  former  years,  drafts  have  been 
made  upon  what  has  been  published  by  newspapers,  and 
the  annual  report  of  the  'Chicago  Daily  Press.'  The  report  of  the 
'Press'  for  many  years  has  been  very  full,  and  it  is  believed  nearly 
correct. 

"At  the  commencement  of  the  present  fiscal  year  of  the  Board, 
the  Directors  caused  books  to  be  procured,  for  the  purpose  of  record- 
ing what  was  collected,  and  it  is  to  be  hoped  that  in  future,  accurate 
accounts  will  be  kept  of  all  transactions,  with  table  showing  imports 
and  exports  of  our  principal  articles  of  commerce. 


[1858]  OF  THE  CITY  OF  CHICAGO  247 

"The  year  now  closed,  although  a  gloomy  one  to  commercial 
men  throughout  the  country,  has  developed  the  fact  that  Chicago 
and  the  Northwest  are  as  well  prepared  to  maintain  their  trade  and 
commerce  in  years  of  adversity  as  the  older  cities  and  States  of  the 
East.  It  is  true  our  grain  trade  has  suffered  the  past  year  for  the 
want  of  a  foreign  demand,  but  it  has  nevertheless  sufficed  to  enable 
our  merchants  generally  to  pay  their  obligations  and  keep  unem- 
barrassed to  their  business  engagements." 

The  capacity  for  handling  and  storing  grain  in  Chicago  was 
given  as  4,095,000  bu.  storage  capacity ;  495,000  bu.  capacity  to 
receive  and  ship  per  day  and  1,345,000  capacity  to  ship  per  day. 

The  Superintendent  gives  a  very  full  account  of  action  of  the 
Board  in  regard  to  inspection,  but  this  has  been  sufficiently  de- 
scribed in  preceding  pages.  " 

Under  the  head  of  flour  he  says : 

"The  year  opened  with  a  comparatively  large  stock  of  flour  on 
hand  for  this  market.  Prices  ruled  low,  and  the  entire  season  has 
been  characterized  by  general  depression  and  a  desire  to  press 
sales  on  the  part  of  manufacturers.  This  fact,  with  the  poor  condi- 
tion of  the  wheat  crop  the  past  season,  has  had  a  tendency  to  largely 
decrease  the  manufacture,  but  we  refer  with  pride  to  a  statement 
of  the  following  facts,  and  think  them  well  worthy  of  consideration. 

"The  exports  from  Chicago  in  1855  were  inside  of  170,000  bar- 
rels. In  1857,  the  amount  reached  260,000  barrels,  and  during  the 
past  year  the  amount  has  reached  nearly  500,000  barrels.  Of  the 
increased  receipts  and  shipments,  over  140,000  barrels  have  been 
manufactured  at  nine  mills  located  within  the  city.  Of  the  balance, 
quite  a  large  portion  has  been  drawn  from  points  not  heretofore 
tributary  to  Chicago,  and  from  a  long  distance — say  Wisconsin, 
Iowa  and  Missouri — many  mills  have  been,  and  are  being  built 
which  have  only  in  a  limited  way  helped  to  swell  the  increase  of 
the  last  year  from  the  difficulty  in  procuring  milling  wheat,  but 
which  another  year,  with  an  average  crop,  will  add  largely  to  the 
aggregate  export.  An  extended  review  of  the  prices,  either  monthly 
or  weekly,  for  the  past  year  is  deemed  unnecessary,  and  aside  from 
the  tables  of  receipts,  shipments,  etc.,  below,  we  would  only  call 
attention  to  the  fact  that  this  is  undoubtedly  the  best  market  for 
purchases  of  flour,  and  is  likely  to  continue  so.  It  is  only  necessary 
to  state  that  all  the  grades  of  flour,  from  tha  best  southern  white 
winter  wheat  to  the  cheapest  spring  wheat  (including  in  its  growth 
a  range  of  over  five  hundred  miles,  north  and  south),  together  with 
the  various  grades  of  Michigan  and  Indiana  flour,  seek  a  market  at 
this  point. 

Wheat 

"It  will  be  seen  from  the  quotations  that  prices  from  the  com- 
mencement of   the  year  until   after  harvest   ruled   extremely  low. 


248 


HISTORY  OF  THE  BOARD  OF  TRADE 


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[18S8]  OF  THE  CITY  OF  CHICAGO  249 

This  was  owing  to  the  abundant  crop  of  1857,  the  want  of  any- 
foreign  demand,  and  the  general  scarcity  of  money  throughout  the 
country.  At  the  commencement  of  harvest  it  was  evident  not  much 
more  than  half  a  crop  had  been  raised,  and  a  speculative  feeling  was 
engendered  among  operators.  Prices  commenced  advancing  in 
August  and  tended  upwards  steadily  until  the  end  of  that  month. 
Receipts  the  first  week  in  August  had  fallen  ofT  to  54,000  bushels, 
the  second  week  they  were  101,000,  the  third  week  208,000,  and  the 
fourth  week  had  increased  to  404,000  bushels.  The  amount  of 
wheat  in  store  had  increased  from  437,000  to  687,000  bushels  during 
that  time.  There  being  no  margin  for  shipments,  a  panic  took 
place  and  prices  receded  as  rapidly  as  they  had  advanced  until  about 
the  first  of  October.  From  that  time  there  was  a  gradual  falling  of? 
in  prices  until  the  close  of  thei'  shipping  season.  On  the  20th  of 
November  the  amount  in  store  was  reduced  to  220,000  bushels; 
receipts  had  fallen  ofi  to  129,000  bushels  the  week  ending  that  date; 
considerable  was  being  forwarded  to  adjoining  States,  and  different 
points  in  Illinois.  Prices  again  rallied,  and  have  been  maintained 
with  slight  variations  the  remainder  of  the  year.  Purchases,  how- 
aver,  since  navigation  closed,  have  been  almost  entirely  for  milling 
purposes,  and  to  supply  portions  of  the  surrounding  country." 

Com 

"Next  in  importance  to  the  wheat  trade  among  our  agricultural 
products,  is  that  of  corn.  Contrary  to  general  expectation,  the  crop 
of  1857  was  large,  but  as  it  did  not  mature,  was  inferior  in  quality. 
As  there  was  little  shipping  demand,  prices  ruled  low  until  about  the 
1st  of  August.  The  certainty  of  a  short  crop  of  wheat,  and  the  sup- 
posed small  amount  of  corn  in  the  country,  created  a  speculative 
feeling  in  this  grain  also.  Prices  rose  rapidly  from  the  last  week 
in  July  until  the  latter  part  of  August,  when  operators,  with  a 
month's  receipts  of  over  one  million  bushels,  and  an  accumulation 
in  store  of  over  half  a  million  bushels,  became  aware  that  prices 
only  were  wanted  for  our  Illinois  farmers  to  furnish  almost  any 
amount  of  corn  that  might  be  called  for.  From  that  time  until  the 
close  of  the  season  prices  gradually  fell  ofi.  The  shipping  demand, 
however,  continued  good  until  the  close  of  navigation,  leaving  but  a 
few  thousand  bushels  in  store.  Since  the  close  of  navigation  the 
local  and  foreign  demand  has  been  fully  up  to  the  supply ;  so  much 
has  been  demanded  by  Canada,  Michigan  and  Indiana  that  prices 
have  been  controlled  by  the  receipts  entirely.  Corn  has  ruled  for 
new  shelled  from  45  to  62  cents  per  60  pounds,  and  in  the  ear  from 
40  to  58  cents  per  70  pounds,  prices  having  fluctuated  from  5  to  10 
cents  per  bushel  per  week.  Quite  a  large  quantity  has  been  taken 
for  distilling  at  points  through  Indiana  and  Ohio." 

The    quantity   of   corn   received    for   the    year   was   8,252,641 
bushels. 


250 


HISTORY  OF  THE  BOARD  OF  TRADE 


[1858] 


Table  Showing  Weekly  Prices  of  Com  During  the  Year  1858. 


Week  ending —  Corn 

January  2 43    @44 

9 45    @46 

16 

23 New 

30 25  to 

February        6 34 

13 60  lbs. 

20 Old,  40 

27 40 

March  6 40 

13 New,30 

20 31     @31^ 

27 32    @i3 

April  3 35 

.    10 37    @38 

17 39    @40 

24 40J^@41 

May  1 44    @45 

8 37    @45 

15 37    (ci>-H 

22 39    @45 

29 44    @48 

June  5 44    @49 

12 46    @5VA 


Week  ending- 
June  19 

July 

August 

September 

October 


No.  1 

Corn 

52 

26 49    @50 

3 45 

10 45    @45J4 

17 4414 


24. 
31. 
7. 


51 
57 
68 


14 64    @6S 

21 68J^@69 

28 61 

4 60    @60J^ 

11 55    @56 

18 57 

25 57J^@58 


55 
50 
50 
49 
58 

November      6 61    @62 

60 

.54    @55 

50 


2. 

9. 
16. 
23. 
30. 


13. 
20. 
27. 


December       4 50    @52 


11. 
18. 
25. 


56 


No.  2 

Corn 

47    @47J^ 

44    @45 

37 

38    @39 

40J^@41 

47 

52 

63 

61    @62 

65}^@66 

57 

56    @57 

53    @54 

55 

55 

53 

48 

48 


Rejected 
Corn 


36    @37 

38 

43 
46    @46J4 
55 


53 
50    @52 


50 


Oats 

"The  crop  of  oats  in  1857  was  large,  and  of  an  excellent  quality. 
The  demand  for  shipment  being  light,  fully  one-half  raised  that  year 
was  on  hand  at  the  opening  of  navigation.  There  was  but  a  slight 
advance  in  prices  until  about  the  middle  of  July,  and  nearly  all  that 
came  forward  was  taken  for  shipment.  In  consequence  of  the  wet 
spring,  it  was  supposed,  early  in  the  season,  that  the  crop  would  be 
light,  and  as  harvest  approached,  it  was  apparent,  not  only  that  but 
few  oats  would  be  harvested  but  that  what  was  harvested  would  be 
miserably  poor.  About  the  first  of  July  operators  from  St.  Louis, 
Quincy,  Burlington,  Iowa,  Cincinnati,  and  other  points,  appeared  in 
the  market,  and  the  price  rapidly  advanced  from  thirty  to  fifty  cents 
per  bushel  up  to  the  15th  of  August.  This  advance  was  caused  by 
the  fact  of  the  crop  of  1858  being  nearly  worthless,  and  the  fear  of 
losing  the  control  of  the  benefits  arising  from  the  scarcity  of  good 
oats  for  seed  and  other  purposes.  In  the  meantime,  the  demand 
for  shipments  had  entirely  fallen  off,  and  on  the  14th  of  August  there 
was  in  store  two  hundred  and  twenty-eight  thousand  bushels.  But 
most  of  the  old  crop  had  come  forward,  and  with  light  receipts,  and  a 
demand  for  the  St.  Louis  market,  prices  have  kept  up  throughout 
the  year  for  the  1857  oats.  Most  of  the  1858  oats  which  have  come 
forward  have  been  taken  for  city  consumption  at  lower  prices.  Oats 
have  been  shipped  to  Chicjigo  from  Buffalo,  Milwaukee,  and  other 
lake  ports,  amounting  to  seventy-five  thousand  bushels,  while  they 
have  been  exported  largely  to  New  Orleans,  St.  Louis,  Cincinnati, 
and  to  points  in  the  interior  west  and  south  of  us.  At  present  the 
stock  of  oats  of  crop  of  1857  on  hand  here  is  small,  and  generally 


[1858] 


OF  THE  CITY  OF  CHICAGO 


251 


held  out  of  the  market  for  spring  sales  for  seeding.  At  present, 
new  are  selling  at  forty  to  forty-eight,  and  old  from  fifty  to  sixty 
ceints  per  bushel."  Amount  received  for  year  1858,  about  2,327,000 
bushels. 

Table  Showing  Weekly  Prices  of  Oats  During  the  Year  1858 


January 


February 


March 


April 


May 


June 


2 22     @25 

9 20y2@21 

16 22     @23 


6 23    @23i/2 

13 24    (§241/2 

20 25 

27 25i/2@26 

3 25     @25i/2 

10 

17 26    @26 

24 27    ©271/2 

1 

8 

15 

22 

29 

5 

12 

19 


July 


23.... 

22 

30.... 

23 

6..., 

...23 

@24 

August 

13.... 

23 

20.... 

...22 

@23 

27. . . , 

...22 

@23 

September 


October 


3 30 

10 301/2 

17 30i/o@31 

24 38 

31 39  @40 

6 43 

14 49  @S0 

21 48  @49 

28 48  @49 

4 47 

11 47 

18 44  @45 

25 40  @45 

2 38  @40 


25 

9.... 

44 

)26 

16.... 

45 

1271/2 

23.... 

. .  31 

@45 

27 

30.... 

,..35 

@45 

25 

November     6.... 

..  34 

(3^45 

26 

13.... 

,..34 

@45 

26 

20. . . . 

,..34 

@45 

26 

27..., 

30 

December      4. . . , 

...43 

(5545 

32 

11... 

48 

31 

18... 

50 

mVA 

25... 

50 

26 31     @2,l}i 


The  extreme  prices  quoted  are  for  old  oats,  or  those  raised  in 
1857.    New  oats  have  sold  much  lower. 


Rye 

"But  a  small  amount  of  rye  is  raised  in  Illinois,  in  comparison 
with  other  grains.  There  is  seldom  any  shipped  from  Chicago,  and 
very  little  used  for  breadstuff.  The  receipts  for  the  year  1858 
foot  up  71,012  bushels.  Of  this  7,569  bushels  have  been  shipped  to 
Buffalo.  Most  of  the  balance  has  been  used  by  distillers,  with  the 
exception  of  763  bushels  remaining  in  store. 

The  following  shows  the  prices  of  rye,  in  this  market,  on  the 
first  day  of  each  month  for  the  year  1858: 


252  HISTORY  OF  THE  BOARD  OF  TRADE  [1858] 

Prices  of  Rye  for  1858 

1858  1858 

January 48@50    July  51@52 

February 48@50     August    59@60 

March   50  September    70@75 

April    49@50     October  55@60 

May 50@53     November 56@57 

June  50@52     December  55@60 

Barley 

"This,  like  the  oat  crop,  is  small,  and  was  supposed  to  be  a  fail- 
ure. Still,  more  barley  has  been  exported  during  the  year  1858  to  the 
east  than  since  Chicago  became  an  exporting  port.  The  largest  ship- 
ment for  any  previous  year  was  in  1854,  which  amounted  to  33,683 
bushels,  while  for  1858  the  amount  was  119,157  bushels.  The  bar- 
ley trade  has  increased  from  192,387  bushels  in  the  year  1853  (vide 
'Press')  to  326,373  bushels  in  1858.  Until  the  past  year  a  large 
amount  of  barley  has  been  imported  from  Canada,  New  York,  Penn- 
sylvania and  Ohio,  and  has  been  distributed  from  here  to  Iowa, 
Wisconsin,  Indiana,  Ohio,  Missouri  and  our  own  State.  Owing  to 
the  inferior  quality  of  that  produced  in  our  own  State,  the  barley 
from  the  east  has  this  season  brought  a  better  price.  Speculators 
were  attracted  to  it  early  in  the  season  by  the  low  price  in  com- 
parison with  former  years,  and  prices  gradually  advanced  from 
30  and  40  cents  in  January  to  the  middle  of  September,  when  it 
reached  60  to  80  cents,  when  the  increased  receipts  and  the  con- 
tinued decline  in  eastern  markets  caused  a  turn  in  the  market,  and 
at  the  close  of  the  season  prices  ranged  at  38  to  40  cents  for  No.  2 
and  65  and  70  cents  for  No.  1.  This  large  difference  in  price  is 
caused  by  the  small  amount  of  strictly  prime  arriving  from  the  crop 
of  1858."    Receipts  for  the  year  1858  were  413,812  bushels. 

Grass  Seed 

"The  quantity  of  grass  seed  marketed  this  year  has  been  large, 
and  the  quality  excellent.  Very  little  clover  seed  has  been  received. 
As  our  canal  and  railroads  make  no  distinction  in  their  books,  but 
enter  both  as  'seeds,'  the  quantity  of  each  kind  received  cannot  be 
arrived  at."  A  total  of  4,271,732  pounds  was  received  during  the 
year. 

Beef  Cattle 

"The  past  year  has  shown  a  very  great  increase  in  the  cattle 
trade  of  Chicago.  Not  only  have  the  vast  prairies  of  Illinois  con- 
tributed largely  to  this  market,  but  Indiana,  Iowa  and  the  entire 
beef-growing  territory  of  the  Northwest  have  all  made  Chicago  the 
center  of  their  operations.    Within  the  past  year,  too,  large  droves 


(1858]  OF  THE  CITY  OF  CHICAGO  2S3 

of  cattle  have  been  driven  hither  from  Texas,  and  this  trade — 
which  has  increased  at  least  two  hundred  per  cent  during  the  year 
1858 — promises  to  be  one  of  no  small  magnitude.  Western  drovers 
find  that,  as  a  general  thing,  it  is  more  profitable  to  sell  their  cattle 
here  than  risk  the  fluctuations  and  uncertainties  of  New  York  or 
Albany  markets.  Thus  has  our  cattle  trade,  within  one  year,  taken 
the  first  position,  as  to  importance,  and  numbers,  in  the  United 
States,  out  of  New  York  City. 

"Here  throughout  the  entire  year  are  concentrated  buyers  from 
all  the  markets  in  the  East — from  Albany,  New  York,  Cambridge 
and  Brighton,  and  cattle  in  good  condition  are  never  a  drug  in  the 
market.  If  cattle  are  low-priced  in  the  East  buyers  have  the  oppor- 
tunity afforded  them  of  pasturing  their  stock  on  our  prairies  till  the 
market  improves,  and  that  at  no  expense  whatever.  This  is  an 
advantage  which  no  other  large  market  in  the  United  States  enjoys; 
and  it  is  this  fact  which,  more  than  anything  else,  contributes  to 
the  growth  and  prosperity  of  the  trade. 

"In  no  other  city  on  this  continent  is  there  a  daily  cattle  mar- 
ket which  has  been  as  regularly  represented  throughout  the  year 
as  our  grain  and  provision  markets,  with  the  publication  of  our 
daily  receipts ;  and  this  enables  the  drover  to  sell  out  almost  as  soon 
as  he  arrives,  without  the  delays  or  hindrances  which  annoy  and 
harass  the  drovers  in  the  East,  if  circumstances  should  delay  them 
beyond  the  special  market  day.  In  Chicago  there  is  generally  a 
good  shipping  demand ;  then  there  is  a  demand  by  beef  packers, 
and  there  is  also  the  constantly  increasing  requirements  of  our  city 
butchers,  so  that  cattle  traders  have  generally  little  difficulty  in  dis- 
posing of  their  stock. 

"The  receipts  of  cattle  at  this  point,  by  railway  alone,  amounted 
during  the  year  to  119,534,  while  the  shipments  foot  up  42,638,  thus 
showing  an  increase  in  the  receipts,  outside  of  the  vast  number 
driven  here  on  foot,  of  71,010  over  the  receipts  of  1857,  and  an 
increase  in  the  shipments  of  17,136  over  that  of  1857. 

"Like  everything  else  during  the  past  year,  beef  cattle  have 
been  low-priced  in  all  the  markets  of  the  United  States.  In  January 
there  was  a  good  demand  for  fat  steers  at  $3@3.75  gross  and  $4 
for  extra ;  but  the  great  bulk  of  the  receipts  were  of  the  denomina- 
tion known  as  'scallawags,'  which  were  sold  at  a  range  of  $2.25@ 
2.50  gross.  In  February,  owing  to  mild  weather,  and  larger  receipts 
■of  good  beeves,  beef  packers  were  induced  to  commence  operations 
again,  and  thus  make  up  the  deficiency  caused  by  the  monetary 
crisis  which  set  in  all  over  the  country  the  previous  fall." 

The  Secretary  states  that  during  the  depression  in  the  sum- 
mer many  drovers  sent  their  cattle  back  to  the  prairies  rather  than 
sell  at  the  current  prices,  one  owner  shipping  his  stock  home  to 
Champaign  County.  During  a  similar  period  of  low  prices  in  the 
fall    some    drovers    had   their   cattle    slaughtered    by   city    packers 


254 


HISTORY  OF  THE  BOARD  OF  TRADE 


[1858] 


and  the  beef  shipped  to  New  York  for  sale.    The  Secretary's  report 
continues : 

Hogs 

"In  addition  to  the  number  of  hogs  used  up  in  the  city  packers 
and  butchers,  Chicago  during  the  past  year  has  become  a  most 
important  shipping  market.  After  the  packing  of  1857-8  was  closed, 
up  to  the  1st  of  November  last,  our  receipts  of  live  hogs  ranged 
from  19,000  to  43,000  monthly.  Such  immense  receipts  during  the 
summer  attracted  hither  buyers  from  the  East,  whose  purchases, 
along  with  those  of  our  own  ice-packers,  rendered  the  market  quite 
active.  The  low  price  of  corn  in  the  early  part  of  the  summer 
throughout  this  State,  and  especially  in  Iowa,  induced  farmers  to 
feed  their  hogs  rather  than  send  their  corn  to  market.  Our  receipts 
were  therefore  composed  principally  of  fat  hogs,  which  were  bought 
by  ice-packers  in  New  York,  Boston  and  other  points." 

As  will  be  seen  from  the  table  of  weekly  prices  given  below, 
the  range  of  prices  during  the  summer  months  was  $3.25@4.40  per 
100  pounds  gross.  Stock  hogs  selling  at  50c@$l  per  100  pounds 
below  these  figures. 

The  following  summary  shows  the  receipts  of  hogs,  live  and 
dressed,  in  1858,  416,225  and  124,261  respectively. 

"The  following  table  shows  the  weekly  prices  of  live  and 
dressed  hogs  during  1858:' 


Prices  of  Hogs  at  Given  Dates  in  1858 


January 


February 


March 


April 


May 


June 


Gross 

2 $.!.70ffl>4.00 

9 3.30(5)3.75 

16 3.25(5)3.75 

23 3.30(5)3.80 

30 3.50@4.00 

6 3.90(5)4.10 

13 4.50 

20 4.50(5)4.75 

27 4.50(5)4.60 

6 4.00@4.25 

13 4.00@4.50 

20 4.25@4.62 

27 4.25(5)4.50 

3 4.25(5)4.50 

in 4.25(5.4.,50 

17 4.00@4.2S 

24 4.00@4.2S 

1 4.00@4.25 

8 4.00(5)4.25 

15 4.00(5)4.25 

22 4.00(5)4.25 

29 4.00(g)4.40 

5 3.90@4.25 

12 3.25(33.50 

19 3.25@3.75 

26 3.00(33.40 


Dressed 


4.35(5>475 
4.10@4.50 
4.25(5)4.50 
4.25@4.50 
4.2S@4.75 
4.75(35.12 
5.50 
5.50(35.75 
5.00(5)5.50 
5.12(35.75 
5.25@5.50 

July 

August 
September 

October 

Gross 

3 $3.00(33.40 

10 3.0O@3.4O 

17 3.50(34.00 

24 3.50@4.30 

31 3.20(34.00 

7 3.30(34.40 

14 3.20(5)4.25 

21 3.20@4.00 

28 3.30@4.00 

4 3.30@4.20 

11 3.25(5)4.25 

18 3.25(34.25 

25 3.50@4.60 

2 3.50@4.50 

9 3.50@4.50 

16 3.50(5)4.25 

23 3.30@4.00 

30 3.50(S4.50 

6 3.50(34.10 

13 3.50(^4.50 

20 3.75@4.60 

27 3.50(34.50 

4 4.40(5)5.30 

11 4.50@5.30 

18 4.25@5.25 

24 4.25@5.40 


Dressed 


$5.12(35.50 
5.30(35.62J4 
4.50@5.5O 
4.50(36.25 
5.25@6.S0 
4.50@5.75 
4.50(36.50 


The  Provision  Trade 

"From  the  rapidly  increasing  importance  of  our  provision  mar- 
ket, and  the  fact  that  in  pork  packing  we  have  advanced  to  the  posi- 
tion of  being  now  the  third  largest  point  in  the  West,  bidding 
fair     in     a     few     years     to     rival     both     Cincinnati     and     Louis- 


[1858]  OF  THE  CITY  OF  CHICAGO  255 

ville,  while  our  beef  packing  far  exceeds,  both  in  extent  and  value, 
any  other  in  the  States,  a  cursory  review  of  the  transactions  for  the 
past  year  cannot  prove  uninteresting  to  the  members  of  the  Board. 
In  the  month  of  January,  1858,  provisions  ruled  lower  than  any 
other  period  of  the  season.  Mess  pork  in  the  early  part  of  the  month 
sold  at  $12@12.50  and  1,500  barrels  were  sold  by  one  of  our  packers 
to  a  Canadian  house  for  April  delivery  at  $12.  Later  in  the  month, 
about  the  25th,  the  market  commenced  improving,  and  sales  were 
made  at  $13  per  barrel,  with  an  advancing  tendency.  Prime  and 
rump  pork  brought  $9.50@10  per  barrel.  Cut  meats  were  dull  and 
in  limited  request  at  4@4j/2  cents  per  pound  for  shoulders,  5@5^ 
cents  for  sides,  and  6@6^  cents  for  hams.  Prime  lard  was  held 
at  8@8^  cents.  At  the  inside  rate  some  large  sales  were  made  to 
speculators.  Mess  and  extra  mess  beef  were  held  at  $10@11  per 
barrel.    No.  1  tallow  at  9j4@10  cents  per  pound. 

"The  improvement  established  in  the  market  at  the  close  of 
the  month  of  January  continued  through  February.  Mess  pork 
sold  readily  at  $14.50@15,  and  prime  and  rump  pork  at  $10.50@11. 
Cut  meats  also  shared  in  the  advance,  and  shoulders  sold  at  5^4 
cents,  sides  at  7  cents  and  hams  at  7j^  cents  per  pound.  Prime 
lard  sold  at  9@9y2  cents  per  pound.  The  outside  figure  was  reached 
about  the  middle  of  the  month,  but  towards  the  close  the  market 
again  declined  yi  cent  per  pound.  Mess  and  extra  mess  beef  sold 
at  $11@12  per  barrel  and  No.  1  tallow  at  10@10j/^  cents  per  pound. 

"At  the  close  of  the  month  of  April  prices  had  reached  the 
highest  point  for  the  year.  In  the  beginning  of  the  month  of  May 
the  eastern  demand  fell  ofif,  and  the  market  became  weaker.  Mess 
pork  was  freely  offered  at  $16.75,  while  prime  and  rump,  for  which 
$14  had  been  refused,  were  freely  offered  at  that  price.  Cut  meats 
were  also  dull  at  5y2@7y'2  cents  for  shoulders,  sides  and  hams. 
Prime  lard  maintained  its  previous  value  better  than  any  other 
product,  and  was  in  demand  at  10j4@10/'2  cents,  but  the  quantity 
offering  was  very  small.  Mess  and  extra  mess  beef  were  firmly 
held  at  $11@12.     Prime  tallow  in  fair  demand  at  9}i  cents. 

"In  August,  most  of  the  winter  packed  pork  being  in  the  hands 
of  one  house,  mess  was  held  oS  at  $17.  The  ice-cured  pork,  how- 
ever, which  was  offered  at  $15.50,  and  which  was  found  to  give 
general  satisfaction,  sufficed  for  the  local  trade  and  prevented  the 
market  from  being  forced  up.  Early  in  the  month  a  sale  of  500 
barrels  mess,  for  delivery  in  the  following  November,  was  made 
at  $13.50,  this  being  the  first  forward  sale  of  the  season.  Towards 
the  close  of  the  month  another  sale  of  500  barrels  mess  for  the  same 
delivery  was  made  at  $14,  and  some  prime  lard  at  9@934  cents. 
Cut  meats,  bacon  and  lard  for  present  delivery  were  scarce  and 
nominal.  Mess  and  extra  mess  beef  $11@12.  Prime  tallow  9^ 
cents. 

"Most  of  the  transactions  in  the  month  of  September  were  for 


256  HISTORY  OF  THE  BOARD  OF  TRADE  [1859] 

forward  delivery.  Several  thousand  barrels  of  mess  pork  were  con- 
tracted for  for  delivery  from  December  to  February  at  $14.50  per 
barrel.  The  purchasers  were  principally  Louisville  houses.  Most 
of  the  old  pork  was  shipped  to  New  York,  and  579  barrels  having 
been  sold  for  Canada  at  $15  the  market  was  pretty  well  cleared. 
Some  prime  lard  was  sold  for  winter  delivery  at  9>^  cents,  but  it 
was  afterwards  offered  at  the  same  figure  unsuccessfully.  There 
were  no  cut  meats  offering.  Mess  and  extra  mess  beef  were  offered 
at  $9.50@10  for  forward  delivery,  but  operators  did  not  seem  desir- 
ous of  taking  hold.     *     *     * 

"The  offerings  for  forward  delivery  were  so  rapidly  picked  up, 
in  the  beginning  of  the  month  of  November,  that  sellers  retired 
from  the  market.  Some  sales  of  mess  pork  were  made  for  delivery 
all  winter,  sellers'  option,  at  $14.50,  but  about  the  20th  the  market 
became  much  excited  and  some  sales  were  made  as  high  as  $16  per 
barrel. 

"The  market  continued  excited  in  the  commencement  of  the 
month  of  December.  Mess  pork  sold  at  $16.50,  and  most  holders 
asked  $17,  but  towards  the  close  of  the  month  buyers  became 
scarce,  and  seemed  distrustful  even  at  $16.  Prime  and  rump 
dragged  heavily  at  $12,  the  stocks  constantly  accumulating  and  no 
buyers  to  be  found.  Cut  meats  were  also  dull  at  5^4  cents,  7y2@7y4 
cents  for  shoulders,  sides  and  hams.  Prime  lard  advanced  to  10^ 
cents,  but  there  seemed  no  disposition  to  operate  at  that  figure,  and 
it  subsequently  declined  to  10^  cents,  again  advancing  at  the  close 
to  10>^@10%  cents.  Mess  and  extra  mess  beef  were  dull  at  9@10. 
Shipments  by  lake  for  the  month  about  4,000  barrels.  Prime  tallow 
in  good  demand  and  firm  at  9>4@10  cents." 

Lumber. — The  total  receipts  of  lumber  for  1858  were  278,943,506 
square  feet,  a  falling  off  of  nearly  40  per  cent  from  the  previous 
year. 

High  Wines. — Total  receipts  and  shipments  of  high  wines  dur- 
ing the  year  1858  were  38,644  and  28,007  barrels  respectively.  The 
amount  manufactured  in  Chicago  during  the  year  was  about  60,000 
barrels. 

Total  Commerce  of  Chicago  in  1858 

Lieutenant-Colonel  J.  D.  Graham,  U.  S..T.  E.,  reported  to  the 
Board  of  Trade  that  the  lake  tonnage  enrolled  at  the  Port  of  Chi- 
cago in  1858  amounted  to  8,151  tons  in  steam  vessels  and  58,771 
tons  in  sail  vessels,  and  that  the  aggregate  value  of  imports  and 
exports  for  the  year  was  $174,896,011.70. 

1859 

The  Legislature  of  fllinois  by  Act  approved  March  7,  1859, 
granted  a  special  charter  to  the  Board  of  Trade  enlarging  its  scope 
in  some  important  particulars;  giving  its  Committee  of  Arbitra- 


0 


Seth    Catlin,    Secretary.    1858-1863 

Came   to   Chicago   1835,    Died    1863. 

Board  of  Trade   Erected    Monument  at   a   Cost  of  $1,000  in 

Rose    Hill. 

Compiled    First  Trade  and   Commerce   Statements. 


[1859]  OF  THE  CITY  OF  CHICAGO  257 

tion  and  Appeals  quasi  judicial  powers ;  authorizing  the  acting  chair- 
man of  either  of  these  committees,  when  sitting  as  arbitrators,  to 
administer  oaths  to  the  parties  and  witnesses  and  to  issue  subpoenas 
and  attachments  compelling  the  attendance  of  witnesses,  the  same 
as  justices  of  the  peace,  and,  in  like  manner,  directed  to  any  con- 
stable to  execute.  Section  eight  of  the  charter  provided  that  when 
"a  final  award  shall  have  been  rendered"  in  any  case  submitted  to 
the  committee  in  writing,  and  no  appeal  taken  within  the  time  fixed 
by  the  rules  or  by-laws,  "then  on  filing  such  award  and  submission 
•  with  the  clerk  of  the  Circuit  Court,  an  execution  may  issue  upon 
such  award  as  if  it  were  a  judgment  rendered  in  the  Circuit  Court, 
and  such  award  shall  thenceforth  have  the  force  and  effect  of  such 
a  judgment,  and  shall  be  entered  upon  the  judgment  docket  of  said 
court." 

The  new  charter  also  conferred  upon  the  Board  power  to 
appoint  inspectors,  weighers,  measurers  and  gangers,  whose  brands 
or  certificates  should  be  evidence  between  buyers  and  sellers 
employing  them  or  assenting  to  their  employment  as  to  the  quality 
or  quantity  of  the  property  so  inspected,  weighed  or  measured.  On 
the  25th  of  March  the  Board  adopted  after  full  discussion  a  new  set 
of  by-laws  designed  to  make  use  of  the  additional  powers  conferred 
upon  the  association  by  the  new  charter. 

Tolls  on  the  Erie  Canal  having  been  materially  reduced,  the 
Board  of  .Trade  adopted  a  memorial  to  Hon.  A.  T.  Gait,  Inspector 
General  of  Canada,  asking  for  a  corresponding  reduction  in  tolls 
on  the  Welland  Canal,  and  delicately  intimating  that  failure  to 
grant  the  desired  relief  might  be  expected  to  cause  a  diversion  of 
the  traffic  hitherto  enjoyed  by  the  Welland  Canal  to  other  routes. 
In  the  latter  part  of  February  a  delegation  from  the  Board  of  Trade 
visited  St.  Joseph,  Missouri,  to  attend  a  celebration  in  honor  of  the 
opening  of  the  Hannibal  and  St.  Joseph  Railroad.  This  event  was 
notable,  as  the  Hannibal  &  St.  Joseph  was  the  first  line  of  railway 
to  connect  the  Chicago  system  of  rails  with  the  Missouri  River. 
It  furnished,  too,  the  most  direct  and  expeditious  route  from  the 
Northern  and  Central  States  to  the  newly  discovered  gold  mines  at 
Pike's  Peak,  which  were  making  almost  as  much  excitement  as 
California  did  ten  years  before.  Lines  of  overland  stages  running 
from  St.  Joseph  and  Leavenworth  made  the  trip  to  Pike's  Peak  in 
about  a  week.  The  people  of  St.  Joseph,  Hannibal  and  Quincy 
organized  a  return  excursion  about  the  first  of  August,  and  the 
Board  of  Trade  sent  a  committee  to  Galesburg  to  meet  the  excur- 
sionists, and  when  they  reached  Chicago  they  were  escorted  to  the 
Exchange,  where  the  usual  speech-making  was  indulged  in.  One 
of  the  notable  features  of  the  welcome  given  to  the  visitors  was  the 
game  dinner  of  the  Audubon  Club  at  the  Tremont  House,  where 
the  menu  was  even  more  elaborate  than  that  provided  by  the  same 
hotel  in  the  previous  year,  to  which  reference  has  been  made. 


258  HISTORY  OF  THE  BOARD  OF  TRADE  [1859] 

In  June  the  Chicago,  Iowa  &  Nebraska  Railroad,  running  west- 
ward from  Clinton  and  virtually  an  extension  of  the  Galena  Air 
Line,  was  opened  to  Cedar  Rapids,  and  the  usual  celebration  fol- 
lowed. 

The  Liverpool  Corn  Exchange  adopted  the  Cental  system  on 
the  first  of  February,  and  the  arrival  of  steamers  with  quotations 
of  that,  or  a  later  date,  was  awaited  with  interest.  About  the  first 
of  November  this  action  was  rescinded  and  wheat  quotations  were 
sent  per  bushel  and  occasionally  per  cental. 

Two  blocks  of  the  horse  railroad  in  State  street,  the  first  street 
car  line  in  Chicago,  having  been  completed  in  January,  and  equipped 
with  a  car,  trial  trips  were  made,  and  passengers  did  not  complain 
of  exorbitant  fares,  although  the  journey  was  short.  Early  in  the 
year  Congress  made  an  appropriation  of  $87,000  for  the  purpose 
of  securing  and  preserving  the  lighthouse  at  Chicago.  A  portion 
of  the  money  was  spent  for  this  purpose,  but  as  the  North  pier  was 
in  a  very  dilapidated  condition,  and  a  Board  of  Trade  committee 
had  expended  several  hundred  dollars  in  temporary  repairs,  a  peti- 
tion to  the  Secretary  of  the  Treasury  asking  that  the  unexpended 
balance  be  used  to  rebuild  the  pier,  was  signed  by  officers  and  mem- 
bers of  the  Board  and  forwarded  to  Washington  shortly  after  Christ- 
mas. The  Secretary  declined  to  act,  and  a  bill  was  introduced  in 
Congress  authorizing  the  use  of  the  unexpended  portion  of  the 
original  appropriation  as  desired  by  the  Board  of  Trade.  It  passed 
the  House  of  Representatives,  but  failed  to  pass  the  Senate. 

The  eleventh  annual  meeting  of  the  Board  of  Trade,  the  first 
under  the  new  charter,  was  held  at  their  rooms,  April  4,  1859,  and 
resulted  in  the  election  of  Julian  S.  Rumsey,  President  (re-elected) ; 
Thomas  H.  Beebe,  First  Vice-President ;  S.  Clary,  Second  Vice- 
President. 

Directors :  E.  W.  Densmore,  Geo.  Steel,  A.  Dow,  Wesley  Mun- 
ger,  Jos.  H.  Tucker,  E.  B.  Stevens,  Geo.  M.  How,  L.  P.  Hilliard, 
A.  S.  Burt,  Hiram  Wheeler. 

A  spirited  campaign  had  been  conducted  by  the  warehouse  and 
shipping  interests  opposed  to  a  vigorous  administration  of  the 
inspection  rules  against  the  re-election  of  Mr.  Rumsey,  who,  more 
than  any  other  member  of  the  Board,  is  entitled  to  credit  for  the 
reforms  of  the  previous  year ;  and  his  triumph  under  the  circum- 
stances indicated  the  determination  of  the  Board  of  Trade  to  adhere 
to  honest  methods  of  business.  The  Directors'  report  recommended 
among  other  things  that  members  buy  and  sell  corn  in  all  casej  by 
the  standard  bushel  of  56  pounds,  and  that  reporters  refrain  from 
reporting  sales  made  otherwise.  The  Treasurer's  report  was  as 
follows :  Balance  on  hand  from  last  year,  $956.75 ;  receipts, 
$4,359.90.  Total,  $5,316.65.  Expenditures,  $5,087.32,  leaving  bal- 
ance on  hand,  $229.33.  There  were  520  names  on  the  Secretary's 
list  of  members,  and   twenty-one   new   members   were   admitted. 


[1859]  OF  THE  CITY  OF  CHICAGO  259 

Seth  Catlin  was  appointed  Secretary  and  George  R.  Eckley, 
Treasurer. 

About  the  first  of  April  the  manufacturers  of  lumber  formed 
an  organization  entitled  "Lumber  Manufacturers'  Association  of 
the  City  of  Chicago,"  and  opened  Exchange  rooms  in  Lind's  block, 
where  it  was  intended  to  buy  and  sell  cargoes  of  lumber.  They 
desired  a  revision  of  the  rules  of  lumber  inspection,  and  intended  to 
petition  the  Board  of  Trade  to  approve  the  revision.  Robert  H. 
Foss  was  elected  President  of  the  association. 

Early  in  May  the  trustees  of  the  Illinois  and  Michigan  Canal 
reduced  tolls  on  many  articles  of  merchandise  and  produce,  includ- 
ing flour,  bacon,  hams,  pork  and  lard,  but  declined  to  make  any 
reduction  on  grains  or  lumber  as  requested  by  the  business  interests 
of  the  Board  of  Trade.  They  also  ignored  the  protest  made  by  the 
directors  of  the  Board  against  removal  of  the  collector's  office  to 
Bridgeport. 

Mr.  John  S.  Newhouse,  who  was  about  erecting  a  building  on 
the  north  side  of  South  Water  street,  between  LaSalle  and  Wells, 
proposed  to  lease  the  second  story  thereof  to  the  Board  of  Trade 
for  an  Exchange  room  for  the  term  of  ten  years  at  $1,250  per  annum. 
This  proposition  was  accepted  by  the  Board,  and  it  was  expected 
that  the  new  rooms  would  be  ready  for  occupancy  by  the  first  of 
January,  1860. 

The  virulence  of  the  attacks  made  by  the  St.  Louis  Chamber 
of  Commerce  and  others  upon  the  Rock  Island  bridge  did  not 
diminish  as  time  wore  on  and  the  vast  traffic  between  Iowa  and 
Chicago  increased.  Statistics  published  about  this  time  showed 
that  with  only  105  miles  of  the  M.  &  M.  R.  R.  (the  Iowa  extension 
of  the  Rock  Island  Railroad)  completed,  ten  loaded  cars  passed  over 
the  bridge  to  every  boat  which  went  through  the  draw,  the  value  of 
this  commerce  already  approximating  that  which  passed  up  and 
down  the  Mississippi  at  this  point.  The  avowed  aim  of  the  St. 
Louis  people  was  removal  of  the  bridge,  in  the  hope  that  a  prece- 
dent might  be  established  which  would  deter  capitalists  from  invest- 
ing money  in  other  bridges,  more  than  one  of  which  had  been  begun. 
Not  content  to  await  the  result  of  a  legal  attack  based  upon  its 
alleged  impediment  to  navigation,  and  supplemented  it  would  seem 
by  criminal  attempts  to  wreck  the  bridge,  its  enemies  persuaded 
the  Secretary  of  War  to  appoint  a  commission  to  report  upon  the 
question  at  issue,  evidently  fearing  that  the  Supreme  Court  of  the 
United  States  would  sustain  a  decision  already  rendered  by  an 
inferior  court  in  favor  of  the  bridge.  The  St.  Louis  Chamber  of 
Commerce  pursued  its  warfare  on  the  bridge  with  so  much  rancor 
that  the  Chicago  "Press  and  Tribune"  "called  upon  the  Board 
of  Trade  to  defend  the  interests  of  the  city  as  well  as  the  States 
east  of  Chicago,  whose  commerce  imperatively  required  not  only  a 
bridge  at  Rock  Island,  but  one  at  Fulton,  at  Quincy,  Burlington, 


260  HISTORY  OF  THE  BOARD  OF  TRADE  [1859] 

Dubuque,  Prairie  du  Chien  and  La  Crosse.  The  amount  of  money 
raised  for  warfare  on  the  bridge,  and  most  of  which  it  was  asserted 
was  used  principally  to  support  hirelings,  to  corrupt  men,  and 
create  public  opinion,  was  $37,500,  of  which  the  city  of  St.  Louis 
and  its  Chamber  of  Commerce  were  credited  with  $17,500,  the  city 
of  New  Orleans  $5,000  and  individuals  $15,000.  A  decision  adverse 
to  the  existence  of  the  bridge  would  have  diverted  considerable 
trafific  temporarily  from  the  east  and  west  railroads  to  St.  Louis, 
but  with  the  growth  of  the  Trans-Mississippi  country,  and  extension 
of  the  railroad  system,  bridges  across  the  great  river  would  soon 
have  been  a  necessity,  and  some  modification  of  the  old  doctrine  of 
the  inviolability  of  navigable  waters  was  inevitable. 

A  great  excursion  of  citizens  of  Cincinnati,  Dayton,  Lexing- 
ton, Ky.,  and  other  places  arrived  in  Chicago  on  the  15th  of  June 
to  celebrate  the  opening  of  the  so-called  "Air  Line  Route"  via 
Cincinnati,  Hamilton  &  Dayton  and  Pittsburgh,  Fort  Wayne  & 
Chicago  Railroads.  The  Chamber  of  Commerce  of  Cincinnati  was 
escorted  by  the  President  and  other  officers  of  the  Board  of  Trade 
of  Chicago  from  the  Tremont  House  to  the  rooms  of  the  association, 
where  a  formal  reception  was  held,  and  an  address  of  welcome  made 
by  President  Rumsey.  Responses  were  made  by  President  Tor- 
rence  of  the  Cincinnati  Chamber  of  Commerce  and  others,  and 
everything  possible  was  done  by  the  citizens  of  Chicago  to  enter- 
tain their  visitors. 

In  the  summer  of  1859  the  Chicago  newspapers,  or  at  least  one 
of  them,  began  to  publish  almost  daily  market  reports  from  Bos- 
ton, Baltimore,  Cincinnati,  New  Orleans,  Toledo  and  other  places, 
as  well  as  from  New  York,  Bufifalo,  Oswego  and  Montreal,  which 
had  been  reported  with  tolerable  regularity  before.  A  meeting  of 
the  Directors  of  the  Board  of  Trade  was  held  on  the  11th  of  July, 
at  which,  after  considerable  discussion,  it  was  resolved  "that  the 
custom  which  prevails  among  certain  warehousemen  of  lending 
grain  which  has  been  stored  with  them  by  other  parties,  or  in 
speculating  in  the  same  themselves,  is  prejudicial  to  the  interests  of 
the  members  of  the  association,  and  exercises  a  false  influence  on 
the  market,  and  ought  to  be  discountenanced  by  the  Board."  It 
was  also  resolved  that  the  warehousemen  be  requested  to  keep 
the  old  and  the  new  crop  of  wheat  in  separate  bins.  It  was  also 
resolved  that  the  present  inspection  of  the  old  crop  be  strictly 
adhered  to. 

The  Board'ofifered  as  prizes  for  exhibits  of  wheat  at  the  coming 
Fair  of  the  United  States  Agricultural  Society  $200  for  the  best  100 
bushels  of  spring  wheat,  $225  for  the  best  100  bushels  of  red  winter 
wheat  and  $250  for  the  best  100  bushels  of  white  winter  wheat,  the 
object  of  the  Board  being  to  distribute  the  wheat  for  seed  during 
the  ensuing  fall  and  spring.  A  premium  of  $50  offered  by  the 
Board  for  the  best  and  most  economical  fanning  mill  for  farmers' 


[1859]  OF  THE  CITY  OF  CHICAGO  261 

use  was  awarded  to  a  Janesville  manufacturing  firm.  Chicago 
grain  dealers  must  have  been  "working  men"  in  the  strictest  sense 
of  the  word,  in  the  year  1859,  and  an  editorial  in  the  "Press  and 
Tribune"  of  July  4,  credits  them  with  being  "the  hardest  worked 
race  of  beings  on  the  face  of  the  earth.  They  get  up  at  sunrise, 
bolt  their  steak  and  rolls,  and  rush  down  to  the  'first  board,'  which 
meets  at  a  well  known  corner  between  8  and  11  o'clock."  At  11  the 
"second  Board"  met  at  the  Board  of  Trade  rooms,  but  buyers  and 
sellers  waited  for  the  New  York  dispatches,  which  were  due  about 
noon.  Early  in  the  afternoon  the  "third  board"  congregated  on 
the  corner  before  mentioned  (called  Gamblers'  corner  by  some 
unregenerate  rascal),  where  nothing  was  heard  but  "No.  1  red," 
"standard,"  "my  option  all  next  week,"  "your  option  next  ten 
days,"  etc.,  until  the  court  house  bell  striking  6  o'clock  cleared  the 
sidewalk  and  allowed  pedestrians  to  pass  unmolested.  The  "fourth 
board"  met  on  the  sidewalk  opposite  the  Tremont  House  an  hour 
later,  and  trading  continued  until  9  o'clock,  when  the  overworked 
grain  traders  went  home  for  a  few  hours'  sleep. 

The  Committee  on  Inspection  had  its  troubles  again  in  1859. 
In  July  the  grade  of  No.  2  white  winter  wheat  was  established,  to 
include  all  white  winter  wheat,  which  was  mixed  with  chess  or 
other  substances  or  was  not  strictly  prime.  Such  wheat  had  been 
put  into  the  bins  with  No.  1  red  before  this  time.  In  August  the 
grade  of  "standard"  spring  wheat  was  dropped,  and  the  minimum 
weight  of  No.  1  spring  was  fixed  at  58  pounds  per  bushel.  No.  2 
spring  at  52  pounds  and  rejected  at  45  pounds.  In  October  a  grade 
of  "extra  club  spring"  wheat  was  established  to  include  a  superior 
quality  of  Northern  Wisconsin  spring  wheat,  arriving  over  the 
newly  opened  line  to  Fond  du  Lac. 

On  the  13th  of  December  the  Directors  again  amended  the 
inspection  rules  by  the  following  resolution :  "Resolved,  That  on 
and  after  the  first  of  January,  1860,  no  spring  wheat  shall  pass  as 
No.  1  that  weighs  less  than  59  pounds  to  the  measured  bushel ;  none 
shall  pass  as  No.  2  that  weighs  less  than  56  pounds  to  the  measured 
bushel,  and  none  shall  pass  as  rejected  that  weighs  less  than  45 
pounds  to  the  measured  bushel."  Inspectors  were  also  directed  to 
reject  grain  mixed  for  the  purpose  of  deception  even  if  it  should 
come  up  to  the  required  standard. 

Rigid  enforcement  of  the  inspection  rules,  and  increasing 
requirements  for  the  higher  grades  of  spring  wheat,  bore  fruit 
during  the  last  half  of  the  year  in  a  better  demand,  and  for  the  first 
time  in  the  history  of  the  Chicago  grain  trade  the  price  of  spring 
wheat  made  a  near  approach  to  red  winter.  Towards  the  close  of 
navigation  No.  1  spring  and  No.  2  red  winter  occasionally  sold  at 
the  same  price,  although  usually  there  was  a  difference  of  two  or 
three  cents  in  favor  of  the  latter,  while  the  new  grade  of  extra  club 
commanded  a  premium  of  about  five  cents  over  No.  1  spring. 


262  HISTORY  OF  THE  BOARD  OF  TRADE  [1859] 

Less  was  heard  in  1859  about  direct  shipment  of  grain  to 
Europe,  and  no  cargoes  are  known  to  have  left  any  lake  port  for  the 
other  side  of  the  Atlantic.  The  shipment  of  staves  and  walnut 
lumber,  however,  continued,  and  in  October  several  of  the  vessels 
engaged  in  this  trade  passed  Constantinople  on  their  way  to  the 
Danube.  Two  others  were  reported  at  Fayal  in  November,  return- 
ing to  New  York,  one  of  them  of  340  tons,  carrying  a  cargo  of  salt, 
and  the  other  of  280  tons,  loaded  with  pig  iron  from  Scotland. 

The  Grand  Trunk  Railway  of  Canada,  which  was  completed  to 
Detroit,  where  connection  was  made  with  the  Michigan  Central 
late  in  November,  furnished  Chicago  another  all  rail  route  via  Mon- 
treal to  the  Atlantic  seaboard  at  Portland,  and  during  the  winter 
made  itself  known  as  a  competitor  for  foreign  trade  by  announcing 
a  through  rate  on  pork  products  of  87i/2  cents  per  100  pounds  to 
Liverpool,  via  Portland. 

Wheat 

The  war  between  Austria  and  France  was  the  great  market 
factor  in  1859.  Under  this  influence  No.  1  red  winter,  which  had 
sold  at  $1.08  at  the  beginning  of  the  year,  advanced  to  $1.68  or  more 
about  the  middle  of  May,  and  No.  1  spring  to  $1.30.  There  was  no 
scarcity  in  Europe,  however,  foreign  markets  refused  to  follow  the 
advance,  and  from  this  time  until  harvest  there  was  a  steady  decline, 
which  was  not  arrested  until  No.  1  red  winter  touched  85  cents 
per  bushel  in  August,  and  No.  1  spring  70  cents,  causing  immense 
losses  to  western  speculators,  who  had  forced  prices  far  above  ship- 
ping values.  The  decline  was  as  great  as  in  the  panic  year  of  1857, 
but  more  gradual.  The  bull  speculation  in  the  spring  was  aided  by 
a  bitter  rate  war  between  the  eastern  railroads,  which  affected 
freight  as  well  as  passenger  fares,  and  gave  the  inflated  prices  of 
wheat  an  appearance  of  stability  which  was  wholly  fictitious.  Just 
before  the  outbreak  of  war,  too,  a  scarcity  of  wheat  developed  in 
St.  Louis,  as  in  some  previous  seasons,  and  the  small  stock  in 
Chicago  was  drawn  upon  to  supply  this  deficiency.  Millers  in 
Michigan,  Indiana,  Illinois,  Wisconsin  and  Iowa  still  further  de- 
pleted Chicago  wheat  stocks. 

Com 

Early  in  June  a  severe  frost,  said  to  have  been  the  most  destruc- 
tive freeze  since  1815,  visited  the  States  east  of  the  Mississippi 
River  and  north  of  the  Ohio,  causing  losses  computed  by  "tens  of 
millions,"  according  to  the  local  press.  The  frost  was  heaviest  in 
Ohio,  Western  Pennsylvania  and  New  York,  and  the  fear  of  a  short 
corn  crop  in  the  autumn  may  have  prevented  this  cereal  from  par- 
ticipating fully  in  the  terrific  decline  which  carried  "standard 
spring"  down  to  51  cents  in  the  latter  half  of  July,  the  price  of  No. 
1  corn  at  the  same  time  being  63@64  cents  per  bushel. 

Another  severe  frost  visited  Michigan,  Wisconsin  and  North- 


[1859]  OF  THE  CITY  OF  CHICAGO  263 

ern  Illinois  early  in  September.  In  Michigan  frost  occurred  on  four 
nights  within  one  week ;  and  yet  in  spite  of  frosts,  and  in  spite  of  a 
drought  in  July  and  August,  the  corn  crop  of  the  West  as  a  whole 
was  reported  larger  than  ever  before.  The  scarcity  of  old  corn, 
however,  was  so  acute  that  the  highest  price  of  the  year  was  reached 
about  the  middle  of  October  after  the  assurance  of  future  abund- 
ance was  complete,  when  81  cents  per  bushel  was  paid  for  a  small 
quantity  of  No.  1  corn  for  shipment. 

Oats 

No.  1  oats  advanced  from  47  cents  at  the  beginning  of  the  year 
to  56  cents  in  May;  declined  again  to  24  cents  early  in  September, 
and  at  the  close  of  the  year  were  salable  at  34  cents  per  bushel. 

Rye 

No.  1  rye,  which  was  quoted  at  60@66  cents  in  the  first  week 
of  January,  advanced  to  $1.15  in  the  latter  part  of  May  and  declined 
to  51  cents  before  the  end  of  July.  In  the  closing  week  of  the  year 
it  was  quoted  at  74@75  cents  per  bushel. 

Barley 

The  highest  quotation  for  No.  1  barley,  $1  per  bushel,  was 
reached  in  February  and  March,  when  a  long  decline  set  in,  lasting 
until  the  close  of  August.  The  lowest  price  of  the  year,  reached 
at  this  time,  was  35  cents,  from  which  there  was  a  sharp  recovery, 
a  part  of  which  was  again  lost  before  the  year  closed.  The  last 
quotation  given  in  Secretary  Catlin's  report  is  59@60  cents. 

Receipts  and  Shipments  in  1859 

Receipts  Shipments 

Flour,  barrels    887,821  686,351 

Wheat,  bushels 8,060,766  7,166,698 

Corn,  bushels    5,401,870  4,349,360 

Oats,  bushels    1,757,696  1,185,703 

Rye,  bushels   231,514  134,404 

Barley,  bushels 652,696  486,218 

In  his  review  of  grain  inspection  the  Secretary  says :  "No  rule 
exists  compelling  inspection  of  grain  received  by  canal,  or  of  grain 
shipped  direct  from  the  cars  into  vessels,  or  into  the  cars  of  other 
railroads."  And  this  fact  explains  why  less  than  half  the  corn 
receipts  were  inspected,  and  only  about  one-fifth  of  the  oats.  Of  the 
wheat  received  nearly  seven-eighths  was  inspected. 

Hogs 

Receipts  of  hogs  at  Chicago  fell  oflf  nearly  50  per  cent,  and  ship- 
ments in  a  slightly  smaller  proportion.  The  decrease  was  due  to 
the  small  corn  crop  of  the  preceding  year.  Total  receipts  were 
271,204,  and  shipments  110,246.     The  number  packed  in  Chicago 


264  HISTORY  OF  THE  BOARD  OF  TRADE  [1859] 

during  the  season  of  1859-60  was  151,339,  or  about  15  per  cent  less 
than  in  1858-9. 

Provisions 

The  Southwest  was  so  bare  of  pork  early  in  the  winter  of  1858-9 
that  St.  Louis  buyers  were  shipping  Chicago  mess  pork  to  St.  Louis 
in  January,  the  difference  in  price  permitting  them  to  send  it  by 
rail  to  Peoria  and  thence  by  Illinois  River  steamboat  at  a  through 
rate  of  55  cents  per  barrel,  leaving  a  profit  of  70  cents  a  barrel. 
Even  the  all-rail  rate  of  70  cents  a  barrel  left  the  shipper  a  margin 
of  55  cents.  Prices  continued  to  advance  from  $16  for  mess  pork 
at  the  beginning  of  the  year  to  $19  in  May.  The  low  price  of  the 
year  was  reached  in  October  and  November  at  $14  per  barrel.  The 
closing  price  in  the  last  of  December  was  about  $15.  About  the 
1st  of  December,  1859,  Thomas  Nash  began  the  preparation  of 
"singed"  bacon  for  the  English  market,  and  soon  developed  a  good 
demand  for  this  product  which  had  not  been  manufactured  in  Chi- 
cago before. 

Cattle 

Receipts  of  cattle  were  very  much  smaller  in  1859  than  in  the 
ipreceding  year,  due  in  part,  according  to  Secretary  Catlin,  to  the 
Iscarcity  of  corn,  in  part  to  the  drought  in  Southern  Iowa  and 
Northern  Missouri,  and  in  part  to  the  absence  of  Texas  cattle, 
which  were  prevented  from  reaching  Chicago  as  they  had  done  in 
1858,  by  the  scarcity  of  grass  in  the  West,  and  the  opposition  of 
Missourians  to  the  passage  of  Texas  cattle  across  their  State. 
Receipts  for  the  year  were  111,694  head,  and  shipments  37,584.  The 
number  packed  was  51,606,  of  which  Cragin  &  Co.  packed  17,718 
and  R.  M.  and  O.  S.  Hough,  their  nearest  competitor,  6,546  head. 

Lumber 

The  lumber  business  made  little  recovery  from  the  depression 
caused  by  the  panic  of  1857,  the  receipts,  302,845,207  square  feet 
(an  increase  of  about  9  per  cent  over  1858),  being  far  below  the 
movement  in  1857.  Prices,  too,  were  low,  and  the  season  was  an 
unprofitable  one,  both  to  manufacturers  and  dealers. 

Transportation 

There  was  so  little  western  grain  to  go  forward  during  the 
greater  part  of  the  year  that  low  rates  prevailed  both  on  the  lakes 
and  on  the  Erie  Canal.  Most  of  the  charters  during  the  season 
prior  to  September  were  at  3@4  cents  for  corn  to  Bufifalo,  and  33^@ 
Ay2  cents  for  wheat  to  the  same  destination.  After  September  1 
rates  advanced,  and  before  navigation  closed  8  cents  was  paid  on 
corn  and  8^^  cents  on  wheat. 

From  Bufifalo  to  New  York  on  the  Erie  Canal,  the  first  rates 
quoted  are  9  cents  on  corn  and  10  cents  on  wheat,  and  these  may 


[1860]  OF  THE  CITY  OF  CHICAGO  265 

be  considered  the  average  rates  of  the  year  until  the  middle  of 
October,  when  12@13  cents  was  paid  on  wheat.  Early  in  Novem- 
ber 18  cents  was  quoted  for  a  day  or  two. 

John  Brown's  insane  and  criminal  attempt  to  liberate  the  slaves 
at  Harper's  Ferry  about  the  middle  of  October,  and  the  approval 
which  his  conduct  received  from  the  small  body  of  radical  aboli- 
tionists in  parts  of  the  free  States,  inflamed  the  Southern  people, 
as  the  people  of  the  North  had  been  exasperated  by  repeal  of  the 
Missouri  Compromise  five  years  before,  added  to  the  bitterness 
which  had  marked  the  relations  of  representatives  from  different 
sections  of  the  Union  for  years,  and  was  an  important  link  in  the 
chain  of  events  which  brought  on  the  Civil  War. 

1860 

The  usual  trouble  about  the  money  which  circulated  in  Chicago 
and  other  western  cities  continued  to  be  a  disturbing  influence  in 
the  grain  trade.  In  the  first  month  of  1860  specie,  or  exchange  on 
specie  paying  banks  in  the  East,  advanced  to  3  per  cent  premium. 
This  figure  measured  the  feeling  of  distrust  with  which  the  busi- 
ness community  regarded  the  bills  of  hundreds  of  widely  scattered 
banks  in  Illinois,  Wisconsin  and  other  western  States  which  were 
accepted  as  "money"  as  long  as  the  Chicago  banks  would  take  them 
on  deposit,  and  which  were  not  instantly  sent  home  for  redemption 
because  of  the  difficulty  in  sorting  out  a  considerable  amount  of 
the  bills  of  any  one  bank,  and  because  of  the  remoteness  of  some  of 
the  banks  of  issue. 

About  the  middle  of  February  a  number  of  Illinois  banks,  whose 
bills  were  secured  by  bonds  of  the  State  of  Missouri,  were  called 
upon  by  the  Auditor  to  deposit  additional  security  or  to  retire  a 
portion  of  their  outstanding  obligations.  Most  of  the  banks  com- 
plied with  the  demands  of  the  Auditor,  and  during  the  summer  the 
premium  for  exchange  on  eastern  specie-paying  banks  gradually 
declined  in  consequence  of  an  abundance  of  grain  bills  of  exchange, 
until  the  currency  situation  ceased  to  cause  apprehension.  Then 
just  before  the  middle  of  November,  came  the  panic  in  stocks  and 
bonds  caused  by  the  preparation  for  secession  which  South  Caro- 
lina and  other  southern  States  were  making,  Missouri  bonds  fell 
below  70  cents,  and  specie,  or  eastern  exchange,  advanced  in  Chi- 
cago to  10  per  cent  premium.  The  Auditor  issued  a  call  to  twenty- 
two  more  Illinois  banks,  demanding  the  deposit  of  additional  secur- 
ity on  the  bills,  and  there  were  many  insolvencies. 

Business  conditions  throughout  the  country  had  improved 
greatly  since  the  panic  of  1857,  and  railroad  extension  which  almost 
ceased  at  that  time  was  begun  again,  although  only  167  miles  of 
track  was  added  in  1859  to  the  entire  system  of  railroads  centering 
in  Chicago.  Completion  of  the  Mississippi  Central  Railroad  about 
the  1st  of  February,  1860,  furnished  the  first  all-rail  route  (except 


266  HISTORY  OF  THE  BOARD  OF  TRADE  [1860] 

for  the  ferry  of  21  miles  between  Cairo  and  Columbus)  between 
Chicago  and  New  Orleans,  and  later  in  the  month  the  railroad 
bridge  at  Clinton  was  finished  from  the  Illinois  shore  to  an  island 
about  half  way  across  the  Mississippi  River.  From  the  western 
end  of  the  bridge  the  Galena  Air  Line  railroad  was  in  position  to 
reach  the  Iowa  shore  by  a  short  ferry  if  an  adverse  decision  should 
be  rendered  by  the  Supreme  Court  in  the  Rock  Island  Bridge  case, 
or  to  extend  its  bridge  acrsos  the  main  channel  if  legal  obstacles 
should  be  removed.  It  was  with  a  feeling  of  disappointment  that 
members  of  the  Board  of  Trade  saw  one  of  the  chief  advantages 
conferred  upon  the  organization  by  the  new  charter  set  aside  on  a 
technicality  by  Judge  Manierre,  who  ruled  in  January,  1860,  that 
because  Section  8  of  the  charter  provided  for  the  issuance  of  an  exe- 
cution under  certain  conditions  upon  an  award  of  the  Arbitration  or 
Appeals  Committee,  "if  no  appeal  were  taken  within  the  time  fixed 
by  the  rules  and  by-laws,"  and  did  not  prohibit  such  appeal,  the  Sec- 
tion must  be  strictly  construed,  and  the  right  of  appeal  "within  the 
time,  etc."  sustained. 

The  new  rooms  of  the  Board  of  Trade  in  the  Newhouse  block 
were  occupied  for  the  first  time  February  29,  1860.  They  comprise 
the  entire  second  story  of  the  building  which  was  150  feet  long 
and  48  feet  wide.  The  Exchange  hall  was  95  feet  long,  47  feet  wide, 
and  18  feet  high.  The  walls  were  frescoed  "in  a  style,  and  on  a  scale 
surpassing  anything  of  the  sort  in  the  United  States,"  according  to 
reports  in  newspapers  of  the  time.  At  the  east  end  of  the  Exchange 
hall  were  the  Secretary's  room,  and  a  reading  room,  and  at  the 
west  end  the  telegraph  office  and  lavatory.  President  Rumsey  gave 
a  sketch  of  the  history  of  the  Board  from  its  organization,  and  ad- 
dresses were  made  by  other  leading  members  of  the  Association. 

Early  in  March  the  Cincinnati  Price  Current  published  its 
annual  report  of  the  pork  packing  of  the  West  for  the  season  of 
1859-60,  giving  the  following  figures:  Ohio,  680,858;  Indiana,  404,- 
046;  Illinois,  504,935;  Kentucky,  322,487;  Missouri,  190,260;  Iowa, 
166,936;  Wisconsin,  54,500;  Tennessee,  26,800.  Total,  2,350,822. 
These  figures  showed  a  decrease  in  number  compared  with  the  pre- 
vious year  of  about  AlA  per  cent  and  there  was  a  trifling  decrease 
in  average  weight  as  well.  Fifty-eight  packing  points  in  Illinois 
outside  of  Chicago  reported,  but  the  only  ones  which  packed  more 
than  25,000  hogs  were  Beardstown  and  Chandlersville,  31,937;  Peo- 
ria, 29,548,  and  Quincy,  58,583. 

The  twelfth  annual  meeting  of  the  Board  of  Trade  was  held 
April  2,  1,860.  The  following  officers  were  elected ;  President,  Ira 
Y.  Munn  ;/  First  Vice-President,  Eli  Bates  ;  Second  Vice-President, 
John  V.  Farwell.  The  Directors  were  J.  W.  Finley,  E.  G.  Wolcott, 
George  Webster,  B.  P.  Hutchinson,  C.  S.  Dole,  C.  H.  Curtis,  D.  L. 
Quirk,  A.  E.  Kent,  Clinton  Briggs,  Julian  Magill.  There  were  at 
this  time  625  members  on  the  roll  of  the  Board  of  Trade. 


11860]  OF  THE  CITY  OF  CHICAGO  267 

At  a  meeting  one  week  later  the  President  announced  that  the 
Board  of  Directors  had  appointed  Seth  Catlin  Secretary,  and  George 
Watson  Treasurer.  At  this  meeting  the  first  suggestion  was  made 
that  corn  should  be  inspected  "No.  1  White,"  "No.  1  Yellow,"  and 
"No.  1  Mixed."  A  committee  was  also  appointed  to  confer  with 
the  warehousemen  as  to  the  proper  and  legal  form  of  warehouse 
receipts.  An  important  railroad  project  was  endorsed  by  the  Board 
of  Trade  at  a  meeting  held  on  the  13th  of  April,  and  at  another 
meeting  in  July.  It  was  the  proposed  Cedar  Rapids  and  Missouri 
River  Railroad  to  which  the  Legislature  of  Iowa  had  recently  trans- 
ferred the  lands  granted  by  Congress  to  aid  in  the  building  of  a  rail- 
road from  the  Mississippi  to  the  Missouri  River,  on  or  near  the  42nd 
parallel  of  latitude.  It  was  virtually  an  extension  of  the  Chicago, 
Iowa  and  Nebraska  Railroad  which,  as  already  stated,  reached 
Cedar  Rapids  during  the  previous  summer,  and  would  provide, 
when  completed,  the  most  direct  route  from  Chicago  to  the  Missouri 
River,  and  from  there  to  Denver,  the  Pike's  Peak  gold  fields,  and 
the  South  Pass  in  the  Rocky  Mountains. 

The  importance  of  better  communication  with  California  was 
felt  throughout  the  East,  and  it  was  a  distinct  gain  in  time  when 
the  "Pony  Express"  was  started  on  the  3rd  of  April,  1860.  By 
relays  of  horses  and  riders,  messages  were  carried  between  St. 
Joseph,  Mo.,  and  San  Francisco,  through  a  country  infested  by 
hostile  Indians,  in  eleven  or  twelve  days,  unless  one  of  the  riders 
happened  to  be  killed  by  the  savages.  The  schedule  time  to  Salt 
Lake  was  124  hours,  and  the  tariff  on  telegraph  messages  of  ten 
words  was  $6.90  from  New  York,  or  $5.30  from  St.  Louis  to  San 
Francisco. 

The  death  of  George  W.  Dole  on  the  13th  of  April  deserves 
mention  because,  more  than  any  other  man,  he  had  been  identified 
with  the  very  beginning  of  trade  and  commerce  in  Chicago,  and 
had  been,  until  a  few  years  before  his  death,  an  important  factor 
in  its  development.  The  first  packer  of  beef  and  pork,  and  almost 
the  first  shipper  of  grain,  he  had  seen  the  little  hamlet  of  which 
he  became  a  resident  in  1831,  expand  into  the  greatest  primary  grain 
market  in  the  world,  and  the  packing  business,  in  which  he  was 
a  pioneer,  developed  until  his  ambitious  city  was  surpassed  only 
by  Cincinnati  and  Louisville. 

The  entry  of  the  Grand  Trunk  Railroad  as  a  competitor  for 
the  export  trade  of  the  West  during  the  winter  months  and  diver- 
sion to  the  Welland  Canal  and  St.  Lawrence  River  of  a  moderate 
share  of  the  summer  traffic,  of  which  New  York  had  previously 
enjoyed  almost  a  monopoly,  aroused  interested  parties  in  the  east- 
ern metropolis  to  seek  a  repeal  of  the  Reciprocity  Treaty  with  Can- 
ada. Members  of  the  Board  of  Trade  and  Western  men  generally 
were  convinced  that  the  treaty  benefited  the  great  agricultural 
states  of  the  West  and  Northwest,  and  at  a  meeting  held  on  the 


268  HISTORY  OF  THE  BOARD  OF  TRADE  [1860] 

19th  of  May  a  committee  appointed  a  month  before  reported,  and 
the  Board  adopted,  a  series  of  vigorous  resolutions  reciting  the  ad- 
vantages of  the  Treaty  to  the  West  and  Northwest,  and  asserting 
that  any  act  on  the  part  of  the  United  States  looking  to  abrogation 
of  this  treaty  would  be  a  severe  blow  to  the  great  interest  of  agri- 
culture. The  resolutions  asserted  that  navigation  of  the  Canadian 
canals  and  the  St.  Lawrence  River  on  equal  terms  with  British  bot- 
toms had  been  of  the  utmost  importance  to  the  Lake  Marine,  and 
they  closed  by  saying  "and  we  do  most  earnestly  but  respectfully 
remonstrate  against  any  action  of  our  government  for  its  termina- 
tion. This  opposition  to  abrogation  of  the  Reciprocity  Treaty,  led 
by  Western  commercial  bodies,  and  principally  by  the  Chicago 
Board,  postponed  action  for  a  time,  and  the  treaty  was  finally  ter- 
minated for  national  reasons. 

The  Republican  National  Convention  met  in  the  "Wigwam," 
corner  Lake  and  Market  Streets,  on  Wednesday,  May  16th,  1860, 
and  the  Board  of  Trade  invited  the  delegates  to  visit  their  new 
rooms,  and  also  provided  an  excursion  on  the  Lake  for  the  enter- 
tainment of  visitors.  Four  schooners,  lashed  together  and  loaded 
with  guests,  were  towed  out  into  the  Lake,  speeches  of  welcome 
were  made  on  behalf  of  the  Board  of  Trade,  and  responded  to  by 
the  visitors,  who  passed  a  vote  of  thanks  to  the  Board.  Little  at- 
tention was  paid  to  business  on  the  day  that  Abraham  Lincoln  was 
nominated  for  the  Presidency,  as  political  excitement  was  at  fever 
heat,  and  many  members  of  the  Board  were  enthusiastic  supporters 
of  "Honest  Old  Abe." 

The  trade  in  oak  and  walnut  lumber  and  in  oak  staves  between 
lake  ports  and  domestic  and  foreign  ports  on  the  Atlantic  continued 
to  thrive  and  a  few  cargoes  of  corn  were  shipped  from  Chicago  to 
Boston  via  Welland  Canal  and  the  St.  Lawrence  River,  the  first 
cargo  of  lumber  from  Chicago  to  Boston  following  the  same  route; 
but  the  only  direct  shipment  of  grain  from  Chicago  to  Liverpool 
was  a  cargo  of  wheat  shipped  in  August  via  Welland  Railway,  which 
appears  to  have  taken  that  route  for  the  purpose  of  testing  the  time 
necessary  to  reach  the  English  market.  It  was  claimed  that  under 
favorable  conditions  twenty  days  would  be  sufficient,  divided  as 
follows:  From  Chicago  to  Port  Colborne,  4  days;  on  Welland  Rail- 
way, 1  day ;  from  Port  Dalhousie  to  Montreal,  3  days ;  from  Mon- 
treal to  Liverpool  (by  steamer),  12  days.  This  wheat  did  not  reach 
Liverpool  in  the  time  scheduled  above ;  but  it  did  arrive  there  in 
twenty-five  days  from  the  date  of  shipment  at  Chicago.  Low  water 
in  the  Illinois  River  again  caused  great  inconvenience  to  grain  mer- 
chants on  the  Board  during  the  latter  part  of  June.  At  one  time 
it  was  reported  that  43  canal  boats  and  steamboats  were  aground 
or  held  up  on  "Tree  Top"  bar,  where  the  depth  of  water  was  only 
19  inches. 

The  generosity  of  the  members  of  the  Board  was  invoked  in 


[1860]  OF  THE  CITY  OF  CHICAGO  269 

behalf  of  sufferers  by  the  great  tornado  which  early  in  June  caused 
immense  destruction  along  its  course  of  450  miles  from  Fort  Dodge, 
Iowa,  to  Ottawa  County,  Michigan.  A  thousand  dollars  were  sub- 
scribed and  Rev.  Robert  Collyer  sent  into  the  field  as  the  Board's 
almoner. 

In  September  the  Board  was  appealed  to  in  behalf  of  Kansas 
settlers  who  were  in  dire  need  of  seed  wheat  on  account  of  failure 
of  the  wheat  crop  in  that  newly  settled  and  long-suffering  territory. 
Excursions  from  Canada,  from  New  Orleans  and  from  Philadelphia 
and  Cleveland  visited  Chicago  during  the  year  and  were  entertained 
by  the  Board  or  by  individual  members  thereof,  and  many  lasting 
personal  and  business  friendships  began.  Perhaps  the  most  formal 
of  these  receptions  was  that  given  to  the  Philadelphia  and  Cleveland 
visitors  in  October,  the  entertainment  closing  with  a  banquet  to 
the  visiting  delegations  at  the  Tremont  House. 

It  was  impossible  to  make  the  inspection  of  grain  satisfactory 
to  everybody,  and  in  May  the  C,  B.  &  Q.  and  R.  I.  Railroads,  which 
were  losing  business  in  corn  on  account  of  the  competition  of  the 
Canal,  threatened  to  withhold  their  cars  from  inspection  unless  all 
grain  (canal  as  well  as  railroad)  was  inspected  as  the  Board  had 
already  resolved  it  should  be.  Owing  to  the  refusal  of  some  re- 
ceivers of  canal  corn  to  pay  inspection  fees,  the  Directors  again 
submitted  the  question  to  the  Board  at  a  meeting  held  June  14th, 
when,  after  some  discussion  the  following  resolutions  were  passed: 

"Resolved,  That  this  Board  instruct  its  Committee  on  Inspec- 
tion to  call  upon  the  different  warehousemen  and  request  them  to 
sign  an  agreement  neither  to  receive  nor  transfer  any  grain  arriving 
in  this  city  by  canal,  unless  said  grain  has  been  previously  inspected, 
to  take  effect  on  the  20th  inst.,  or  as  soon  as  the  agreement  may  be 
signed. 

"Resolved,  That  the  members  of  the  Board  agree  that  they 
will  neither  buy  nor  sell  any  canal  grain  which  has  not  been  in- 
spected." 

In  August  the  Directors  of  the  Board  again  changed  the  grades 
of  spring  wheat,  and  directed  that  receipts  should  be  divided  into 
"Extra  Club,"  "Extra  Spring,"  "No.  1  Spring,"  and  "Rejected 
Spring,"  and  on  the  15th  of  September  another  change  was  made 
establishing  the  following  grades  of  spring  wheat :  Extra  Club,  to 
be  sound,  well  cleaned,  and  to  consist  of  pure  club  wheat  weighing 
not  less  than  60  pounds  to  the  measured  bushel ;  Northwestern 
Club,  to  be  sound,  well  cleaned,  and  to  comprise  all  kinds  of  bright 
amber-colored  spring  wheat  weighing  not  less  than  59  pounds  to 
the  measured  bushed ;  No.  1  Spring,  the  berry  to  be  plump,  well 
cleaned  from  other  grains,  and  to  weigh  not  less  than  59  pounds 
to  the  measured  bushel ;  No.  2  Spring,  to  be  sound,  but  not  clean 
enough  for  No.  1,  and  to  weigh  not  less  than  56  pounds  to  the 
measured   bushel ;   Rejected   Spring,  all   unsound,   unmerchantable 


270  HISTORY  OF  THE  BOARD  OF  TRADE  [1860] 

spring  wheat,  and  to  weigh  not  less  than  45  pounds  to  the  meas- 
ured bushel. 

The  average  premiums  paid  during  the  early  autumn  for  the 
higher  grades  of  spring  wheat  were :  For  No.  1  Spring,  2@3  cents 
over  No.  2;  for  Northwestern  Club,  4@6  cents  over  No.  2;  for 
Extra  Club,  8@9  cents  over  No.  2,  but  later  in  the  season  the  pre- 
mium paid  for  Extra  Club  was  materially  increased. 

In  November  a  radical  change  was  made  in  the  rules  regarding 
corn  inspection,  and  the  grades  of  "Pure  White,"  "Pure  Yellow," 
"Mixed,"  and  "Rejected"  were  adopted  in  lieu  of  those  before  ex- 
isting. 

Elevators 

The  storage  capacity  of  the  city  was  increased  during  the  year 
1860  by  the  construction  of  the  Smith  &  Sturges,  and  the  Munger, 
Armour  and  Dole  elevators,  each  of  700,000  bushels  capacity.  The 
Secretary  gives  the  total  capacity  at  the  close  of  the  year  as  5,475,- 
000  bushels. 

Such  a  flood  of  golden  grain  as  poured  into  Chicago  on  every 
transportation  line  from  the  West  in  1860  was  never  seen  before  in 
any  primary  market  on  earth.  An  increase  of  75  per  cent  in  receipts 
of  wheat  over  the  previous  year,  two  hundred  per  cent  in  corn,  and 
fair  increases  in  oats  and  rye  made  the  total  inward  movement  of 
grain  twice  as  large  as  in  1859  and  nearly  fifty  per  cent  in  excess 
of  1856,  which  had  been  the  banner  year  hitherto.  Secretary  Catlin 
was  fully  justified  in  congratulating  the  members  of  the  Board 
upon  "an  astonishing  increase  over  any  former  year  of  our  trafific 
in  property  generally  marketed  in  the  Exchange  rooms."  Nor  was 
the  commercial  growth  confined  to  the  grain  trade.  More  cattle 
were  received  by  eighty  per  cent,  and  more  hogs  by  forty-five  per 
cent  than  in  1859.  But  while  the  number  of  hogs  packed  in  the 
season  of  1860-1  exceeded  the  packing  of  the  previous  season  nearly 
eighty  per  cent,  the  number  of  cattle  packed  in  1860  fell  off  mate- 
rially, and  Secretary  Catlin  could  give  no  better  reason  for  this 
singular  fact  than  "for  the  past  two  years  the  business  had  been 
overdone." 

The  roll  of  members  contained  the  name  of  nearly  every  prom- 
inent business  man  in  all  branches  of  trade,  thus  showing  the  im- 
portance attached  by  the  community  to  the  action  of  the  Board  of 
Trade  upon  public  questions,  and  the  high  esteem  in  which  the 
Board  as  an  organization  was  held. 

The  quantities  of  grain  received  and  shipped  at  Chicago  for 
the  year  1860  were : 

Received       Shipped 

Flour    barrels        713,348         698,132 

Wheat    bushels  14,427,083     12,402,197 

Corn    "        15,262,394     13,700,113 


[1860]  OF  THE  CITY  OF  CHICAGO  271 

Received  Shipped 

Oats    "         2,198,889  1,091,698 

Rye  "            318,976  156,642 

Barley   "            617,619  267,449 

Besides  this  there  were  consumed  and  unaccounted  for  231,824 
barrels  of  flour ;  used  by  distillers,  brewers  and  unaccounted  for, 
wheat,  227,000;  corn,  1,404,762;  oats,  729,561;  rye,  88,035;  barley, 
298,322  bushels;  floured  by  city  mills,  wheat,  1,160,000  bushels. 

Wheat 

The  quality  of  the  wheat  crop  in  Chicago  territory  in  1859  was 
so  good  that  an  export  demand  for  it  sprang  up  as  soon  as  the  dis- 
astrous speculation  of  the  summer  of  that  year  was  at  an  end ;  and 
before  the  1st  of  January,  1860,  a  substantial  advance  took  place, 
based  entirely  upon  consumptive  demand.  So  urgent  wag  the 
demand  that  at  the  close  of  navigation  only  75,000  bushels  remained 
in  all  the  elevators  of  the  city.  Even  after  the  first  of  January,  when 
No.  1  spring  wheat  had  risen  to  about  a  dollar  a  bushel,  and  No.  1 
red  winter  to  $1.08,  there  was  further  improvement  culminating  in 
the  latter  part  of  April  at  $1.15  for  No.  1  spring  wheat.  A  batch 
of  gloomy  crop  reports  contributed  to  this  advance.  But  this  price 
could  not  be  maintained  and  shortly  after  the  first  of  July  more 
favorable  news  came  from  the  harvest  fields,  and  in  August  reports 
of  such  yields  as  40  and  50  bushels  of  spring  wheat  in  northern  Illi- 
nois, and  40  bushels  or  more  in  Wisconsin  and  Minnesota,  forecast- 
ing great  abundance  in  the  autumn.  Under  this  prospect  and  the 
pressure  of  actual  receipts  when  the  crop  began  to  move  in  unex- 
ampled volume  in  August  and  September,  prices  declined  steadily 
with  occasional  reactions  until  No.  1  spring  wheat  touched  68  cents 
a  bushel  early  in  December.  A  fair  reaction  carried  the  market  up 
to  79@  80  cents,  the  closing  quotation  of  the  year.  Secretary  Catlin 
reported  receipts  for  the  year  1860  as  14,427,083  bushels,  and  ship- 
ments as    12,402,197. 

Com 

The  East  was  so  bare  of  corn  in  the  winter  of  1859-60  that 
more  than  half  a  million  bushels  of  new  corn  were  shipped  by  rail 
to  New  York,  Boston,  Philadelphia  and  other  eastern  markets, 
an  unprecedented  movement  at  that  season  of  the  year.  An  equal 
quantity  had  gone  forward  by  lake  during  the  last  few  weeks  of 
navigation,  and  still  there  was  a  moderate  accumulation  in  Chicago 
elevators  when  navigation  opened  in  the  spring  of  1860.  It  had 
become  apparent  to  the  trade  at  this  time  that  the  crop  of  1859  was 
one  of  good  average  yield  on  a  largely  increased  acreage.  The 
quotation  for  No.  1  corn  at  the  beginning  of  the  year  was  50  cents 
a  bushel,  and  although  it  was  under  45  cents  much  of  the  time  in 


272  HISTORY  OF  THE  BOARD  OF  TRADE  [1860] 

February  and  March,  the  high  point  of  the  year  was  reached  during 
the  latter  part  of  April  at  58  cents.  Having  established  this  record 
for  the  year,  the  decline  was  slow  but  without  notable  interruption 
until  near  the  close  of  the  year,  when  No.  1  corn  sold  below  30 
cents  a  bushel.  Receipts  were  15,262,394  bushels,  and  shipments 
13,700,113. 

Oats 

The  oat  crop  in  1859  was  large  enough  to  supply  all  demands 
until  the  crop  of  1860  was  harvested,  and  as  a  result  the  decline 
in  price  was  almost  continuous  from  the  middle  of  January  when 
No.  1  oats  touched  38  cents  (two  cents  above  the  quotation  at  the 
beginning  of  the  year)  until  November  and  December,  when  bot- 
tom was  reached  at  16@16j/^  cents  for  the  same  grade.  The  heavy 
crops  of  wheat  and  corn  and  consequent  high  lake  freights  con- 
tributed to  the  depression  in  oats.  Receipts  for  the  year  were  2,- 
198,889  bushels  and  shipments  1,091,698. 

Rye 

There  was  a  small  stock  in  store  at  the  beginning  of  the  year 
and  No.  1  rye  advanced  from  75  cents  to  92  cents  before  the  close 
of  January.  This  price  was  not  reached  again ;  the  old  crop  was 
exhausted  in  June,  and  the  new  crop,  which  was  a  large  one,  began 
to  come  forward  the  last  of  July.  First  arrivals  brought  53  cents 
a  bushel,  but  the  supply  was  too  great,  and  after  a  moderate  reac- 
tion in  September  and  early  October,  the  market  settled  down  to 
40  cents  in  December.  Final  quotations  at  the  end  of  that  month 
were  45^@46  cents.  Receipts  were  318,976  bushels  and  shipments 
156,642. 

Barley 

No.  1  barley  was  in  request  at  57@60  cents  per  bushel  in  the 
first  week  of  January,  and  after  a  slight  depression  a  few  weeks 
later  advanced  to  78  cents  about  the  first  of  May.  The  new  crop 
was  badly  injured  during  the  harvest  season  and  No.  1  sold  as  low 
as  33  cents  in  July,  advanced  to  70  cents  during  the  last  week  in 
September  and  was  quoted  38@43  cents  during  the  closing  week 
in  December.  Receipts  were  617,619  bushels  and  shipments  267,- 
449  bushels. 

Provisions 

Receipts  of  cattle  for  the  year  1860  were  177,101  head  and 
shipments  97,474.  The  number  packed  in  Chicago  was  34,623 
against  51,606  in  the  preceding  year.  Cragin  &  Co.  packed  17,000 
head ;  seven  other  packers  a  total  of  17,623.  Receipts  of  hogs  in 
1860  were  392,864  and  shipments  227,164.  The  number  packed 
during  the  packing  season  of  1860-61  was  271,805.  Cragin  &  Co. 
led  the  thirty-nine  packing  firms  with  33,600  head,  the  only  others 
credited  with  more  than  20,000  head  being:  R.  M.  and  O.  S.  Hough, 


[1860]  OF  THE  CITY  OF  CHICAGO  273 

28,114;  S.  Holmes  &  Son,  25,466;  A.  E.  Kent  &  Co.,  22,500;  Kreigh 
&  Harbach,  22,500;  Tobey  &  Booth,  21,708. 

Mess  pork  advanced  from  $15.50  per  barrel  at  the  beginning 
of  the  year  to  $20.00  in  September  and  October,  and  lard  from  9j/^ 
to  13  cents ;  but  both  declined  rapidly  under  the  pressure  of  large 
receipts  of  hogs,  and  the  last  quotations  of  1860  were  $15  for  the 
best  city-packed  mess  pork  and  10^@11  cents  per  pound  for  lard. 

Mess  beef  was  comparatively  steady  within  a  range  of  $8@12 
per  barrel  for  the  best  city  brands. 

Lumber 

The  lumber  trade  which  a  few  years  before  contended  with 
the  grain  business  for  first  place  among  the  commercial  activities 
of  the  city  still  felt  the  depression  due  to  the  panic  of  1857,  the 
short  crop  of  1858,  and  low  water  in  the  Illinois  River.  It  was 
only  when  the  near  approach  of  the  harvest  of  1860  gave  promise 
of  future  abundance  with  consequent  prosperity  for  the  farmers 
that  a  permanent  revival  took  place  and  this  was  too  late  to  attract 
large  supplies  before  the  end  of  the  season.  The  receipts  were 
262,494,626  square  feet  against  302,845,207  square  feet  in  1859.  They 
were  the  smallest  receipts  since  1854. 

Seeds 

Receipts  of  seeds  (mainly  Timothy  seed),  were  7,071,074 
pounds,  an  increase  of  35  per  cent  over  the  year  1859.  The  virgin 
soil  of  the  Northwest  produced  an  article  almost  free  from  foul 
seeds,  and  it  was  in  constant  demand  in  the  older  parts  of  the 
country. 

Salt 

Syracuse  Solar  Salt,  against  which  a  prejudice  existed  prior 
to  1858,  almost  entirely  supplanted  "Turk's  Island"  for  packing 
purposes  after  that  date.  Government  tests  showed  it  fully  equal 
to  the  latter,  and  practical  demonstration  by  packers  confirmed 
these  experiments  made  in  the  laboratory.  The  first  mention  of 
Michigan  salt,  which  a  few  years  later  disputed  the  market  with 
the  Syracuse  product,  is  made  by  the  Secretary  in  1860.  He  says, 
"In  consequence  of  discoveries  of  valuable  salt  springs  in  Michigan 
our  course  of  trade  in  salt  will  undoubtedly  be  changed  when  the 
necessary  preparations  are  made  for  manufacturing." 

High  Wines 

Receipts  of  high  wines  in  1860  were  62,126  barrels  and  the 
city  manufacture  was  62,400  barrels,  making  a  total  supply  of 
124,526  barrels.  The  shipments  were  65,223  barrels.  Prices  de- 
clined from  2\@2\y2  cents  per  gallon  at  the  beginning  of  the  year 
to  I4y2@l5  cents  at  the  close. 


274  HISTORY  OF  THE  BOARD  OF  TRADE  [18601 

Transportation 

Vessel  owners  reaped  a  harvest  in  1860.  Navigation  opened 
about  the  12th  of  April,  the  first  charters  having  been  made  some 
days  before  at  7  cents  for  corn  to  Bufifalo  and  8  cents  for  wheat. 
Few  charters  were  made  during  the  summer  at  less  than  4  cent? 
for  corn  and  5  cents  for  wheat;  the  average  was  perhaps  5  and  6 
cents,  respectively.  But  about  the  middle  of  August,  when  the 
immense  tonnage,  present  and  prospective,  of  the  new  crop  became 
visible,  rates  suddenly  advanced  to  14  cents  for  corn  and  16  cents 
for  wheat.  Seventeen  cents  was  paid  for  corn  in  October,  but  late 
in  November  lower  rates  were  accepted,  the  last  charters  to  Buffalo 
being  made  at  9>^  cents  for  corn  and  10^  cents  for  wheat. 

On  the  Erie  Canal  freights  were  low  during  the  early  part  of 
the  season,  the  first  charters  being  made  in  May  at  11  cents  on 
corn  from  Buffalo  to  New  York ;  in  June  10@10j/l  was  the  ruling 
rate,  in  July  11  cents;  in  August  12@15  cents;  in  September  and 
October  14@18  cents;  in  November  as  high  as  23  cents  on  corn 
and  25  cents  on  wheat.  Just  before  the  closing  of  the  canal,  corn 
was  taken  at  16  cents  to  New  York.  All  rail  freights  to  New 
York  were  65  cents  per  hundred  pounds  on  wheat,  corn,  beef  and 
pork  in  January,  1860;  45  cents  in  May  and  June;  50  cents  in  July, 
August  and  September  and  65  cents  in  November  and  December. 

Secretary  Catlin's  list  of  members  at  the  close  of  1860  con- 
tains 665  names,  of  whom  206  are  classified  as  general  commission 
merchants,  143  as  produce  commission  merchants,  41  as  grain  deal- 
ers, 25  as  wholesale  grocers,  16  as  lumber  dealers  and  manufactur- 
ers, 13  as  beef  and  pork  packers,  and  the  remainder  distributed 
among  fifty-five  other  vocations. 


CHAPTER  V 

The  Board  of  Trade  During  the  Civil  War 

1861 

THE  State  of  South  Carolina  passed  an  ordinance  of  secession 
from  the  United  States  December  20,  1860,  soon  after  the  elec- 
tion of  Abraham  Lincoln  to  the  Presidency.  Mississippi  followed  on 
the  9th  of  January,  1861,  and  during  the  winter  and  spring  Florida, 
Alabama,  Georgia,  Louisiana,  Texas,  Virginia,  Arkansas  and  North 
Carolina,  in  the  order  named,  seceded.  Tennessee  joined  the  Con- 
federacy in  June.  The  arsenals,  forts,  naval  vessels,  money  and 
other  property  of  the  government  in  the  Southern  States  were 
seized,  often  with  the  connivance  of  disloyal  officers  of  the  army 
or  navy  in  sympathy  with  the  insurgents,  and  other  acts  of  war 
were  committed  by  them  without  let  or  hindrance  from  the  admin- 
istration of  Mr.  Buchanan.  Even  the  attack  upon  the  Star  of  the 
West  in  the  harbor  of  Charleston  on  the  9th  of  January  and  the 
surrender  by  General  Twiggs  in  February  of  the  United  States 
troops  in  Texas  failed  to  rouse  the  President  to  the  necessity  of 
protecting  the  property  and  honor  of  the  nation  of  which  he  was 
the  nominal  head. 

The  real  reason  for  this  outbreak  has  been  well  stated  by 
Woodrow  Wilson  in  his  "History  of  the  American  People."  He 
says  (in  vol.  4,  p.  208)  :  "The  southern  leaders  had  not  at  first 
expected  this  (i.  e.,  war).  They  had  thought  to  bring  on  a  con- 
stitutional crisis  but  not  a  civil  war.  They  had  meant  at  any  haz- 
ard to  make  good  their  rights  under  the  federal  arrangement,  and 
had  deliberately  resorted  to  secession  because  they  thought  that 
better  terms  could  be  made  out  of  the  Union  than  in  it ;  but  they 
had  expected  their  opponents  at  the  North  to  come  to  terms.  Their 
people  had  followed  and  upheld  them  upon  that  expectation  and 
would  not  willingly  have  followed  them  on  any  other." 

Although  too  young  to  take  part  in  the  great  struggle,  Mr.  Wil- 
son's Virginian  birth  and  his  intimate  social  and  political  relations 
in  later  years  with  men  who  had  been  prominent  in  the  councils 
of  the  Southern  Confederacy  give  his  testimony  peculiar  value. 
Slightly  paraphrased,  it  means  that  the  leaders  of  the  movement, 
dissatisfied  with  Mr.  Lincoln's  election,  purposed,  by  threat  of  war, 
to  revolutionize  the  government  of  the  United  States  and  to  force 
upon  the  other  States  of  the  Union  a  compromise  under  the  terms 
of  which,  and  in  disregard  of  the  result  of  the  Presidential  contest, 
their  control  of  public  afifairs  should  be  continued. 

275 


276  HISTORY  OF  THE  BOARD  OF  TRADE  [1861] 

This  was  no  sudden  revolt.  In  1832  the  people  of  South 
Carolina,  misled  by  the  sophistries  of  John  C.  Calhoun,  and  cha- 
grined that  the  city  of  Charleston  was  falling  behind  its  northern 
rivals,  New  York,  Philadelphia  and  Boston,  attempted  to  nullify 
the  tariff  laws  of  the  United  States,  and  authorized  the  levy  of 
troops  to  support  this  practical  dissolution  of  the  Union.  To  em- 
phasize their  contempt  for  the  union  of  which  South  Carolina  was 
a  part,  the  South  Carolina  convention,  on  the  24th  of  November, 
1832,  announced  to  the  government  of  the  United  States  and  the 
people  of  the  Co-States  that  the  people  of  South  Carolina  would 
not  submit  to  the  use  of  force  to  reduce  the  State  to  obedience. 
Any  act  passed  by  Congress  and  intended  to  coerce  the  State,  shut 
up  her  ports,  destroy  or  harass  her  commerce,  would  be  a  just 
cause  for  secession,  and  the  people  of  South  Carolina,  absolved  from 
all  political  connection  with  the  people  of  the  other  States,  would 
organize  a  separate  government  and  do  all  other  things  which  a 
sovereign  and  independent  State  had  a  right  to  do. 

In  other  words  the  people  of  South  Carolina  claimed,  in  1832, 
the  right  to  declare  null  and  void  any  law  of  the  United  States 
whose  operation  was  not  pleasing  to  them,  to  demand  its  repeal  and 
to  insist  that  the  government  of  the  United  States  should  pass 
only  such  laws  as  the  people  of  South  Carolina  desired. 

In  every  popular  government  it  is  a  part  of  the  business  of 
politicians  to  invent  some  shibboleth  which  will  appeal  to  the  pas- 
sions and  prejudices  of  the  multitude,  attracting  them  to  one  side, 
and  repelling  them  from  the  other.  Such  a  catch-word  was  "State 
Rights."  It  was  admirably  adapted  to  excite  both  prejudice  and 
hatred ;  because  it  implied  that  some  power  (in  this  case  the  gov- 
ernment of  the  United  States)  was  attempting  to  abridge  the  rights 
of  certain  States  of  the  Union,  and  that  those  rights  were  in  danger 
of  extinction  unless  the  nefarious  plot  should  be  checked.  In  real- 
ity, however,  it  was  intended  to  convey  the  idea  of  State  supremacy, 
and  thus  to  appeal  to  the  large  number  of  voters  in  all  the  States 
who  had  been  opposed  to  the  adoption  of  the  Constitution  because 
under  this  great  instrument  a  government  was  established  which 
was  supreme  over  all  the  States  and  greatly  curtailed  the  powers 
they  had  exercised  under  the  League  of  States  known  as  the  Con- 
federation. 

Andrew  Jackson,  the  President  of  the  United  States,  was  the 
leader  of  the  "State  Rights"  party  and  a  native  of  South  Carolina ; 
but  in  the  great  crisis  of  1832  he  did  not  waver  in  his  determination 
to  do  his  duty  to  the  nation  which  had  just  honored  him  by  re-elec- 
tion to  the  presidential  chair.  On  the  10th  of  December,  1832,  he 
issued  a  proclamation  to  the  people  of  South  Carolina,  in  the  course 
of  which  he  said :  "The  laws  of  the  United  States  must  be  executed. 
I  have  no  discretionary  power  on  the  subject.  My  duty  is  emphat- 
ically pronounced  in  the  Constitution.     Those  who  told  you  that 


[1861]  OF  THE  CITY   OF  CHICAGO  277 

you  might  peaceably  prevent  their  execution  deceived  you.  They 
could  not  have  deceived  themselves ;  they  know  that  a  forcible  oppo- 
sition could  alone  prevent  the  execution  of  the  laws,  and  they  know 
that  such  opposition  must  be  repelled.  Their  object  is  disunion. 
But  be  not  deceived  by  names.    Disunion  by  armed  force  is  treason." 

The  Ordinance  of  Nullification  fixed  the  first  day  of  February, 
1833,  as  the  day  upon  which  it  should  take  effect,  but  it  was  not 
the  President's  intention  to  wait  for  the  people  of  South  Carolina 
to  commit  an  overt  act  of  war.  To  a  member  of  the  House  of  Rep- 
resentatives from  South  Carolina  who  called  upon  him  before  leav- 
ing for  home,  the  grim  old  soldier  said:  "Please  give  my  compli- 
ments to  my  friends  in  your  State  and  say  to  them  that  if  a  single 
drop  of  blood  shall  be  shed  there  in  opposition  to  the  laws  of  the 
United  States,  I  will  hang  the  first  man  I  lay  my  hand  on  engaged 
in  such  treasonable  conduct  upon  the  first  tree  I  can  reach."  (Wood- 
row  Wilson,  vol.  4,  p.  i7.) 

On  the  24th  of  January,  President  Jackson  wrote  to  Poinsett, 
one  of  the  leaders  of  the  Union  men  of  South  Carolina,  "Give  me 
early  information  officially  of  the  assemblage  of  a  force  armed  to 
carry  into  effect  the  ordinance  and  laws  nullifying  our  revenue  laws 
and  to  prevent  their  execution,  and  in  ten  or  fifteen  days  at  the 
farthest  I  will  have  in  Charleston  ten  or  fifteen  thousand  well-organ- 
ized troops,  well  equipped  for  the  field,  and  twenty  thousand  or 
thirty  thousand  more  in  the  interior."    (McMaster,  vol  6,  p.  162.) 

No  one  can  doubt  the  purpose  of  President  Jackson  as  expressed 
in  these  patriotic  words.  Nor  is  there  now  any  question  that  an 
armed  clash  at  that  time,  resulting  as  it  must  have  resulted  in  the 
quick  overthrow  of  the  nullifiers  and  secessionists,  would  have  set- 
tled for  many  generations  the  political  heresy  of  State  Supremacy, 
and  prevented  the  great  conflict  which,  twenty-eight  years  later, 
desolated  the  land.  But  the  line  of  least  resistance  was  followed 
and  Congress  passed  a  compromise  bill  which  made  material  reduc- 
tions in  the  tariff  and  induced  the  authorities  of  South  Carolina  to 
recede  from  their  revolutionary  action,  exulting  nevertheless  that 
they  had  successfully  defied  the  government  of  the  United  States. 
As  one  of  the  leading  newspapers  expressed  it,  "This  little  State, 
in  the  mere  panoply  of  courage  and  high  principles,  has  foiled  the 
swaggering  giant  of  the  Union ;  30,000  Carolinians  have  not  only 
awed  the  wild  west  into  respect,  compelled  Pennsylvania  stolidity 
into  something  like  sense.  New  York  corruption  into  something 
like  decency,  Yankee  rapacity  into  a  sort  of  image  of  honesty ;  but 
(alluding  to  the  Union  party)  all  this  has  been  loftily  and  steadily 
done  in  the  face  of  17,000 — what  shall  we  call  them?"  (The  Amer- 
ican Statesman,  p.  586.) 

Two  years  later  Mr.  Calhoun  was  again  advocating  a  disrup- 
tion of  the  Union,  this  time  upon  the  negro  question,  as  President 
Jackson  had  predicted.    Finding  it  impossible  to  unite  the  Southern 


278  HISTORY  OF  THE  BOARD  OF  TRADE  [1861] 

States  in  opposition  to  a  protective  tariff,  Mr.  Calhoun  dropped 
that  pretext  and  told  his  friends  that  the  basis  of  Southern  Union 
must  be  shifted  to  the  slave  question. 

■  From  this  time  forward  the  talented  senator  from  South  Caro- 
lina, whose  ambition  to  become  President  of  the  United  States  had 
been  thwarted  by  his  quarrel  with  General  Jackson,  made  it  the 
business  of  his  life  to  arouse  the  animosity  of  the  Southern  people 
against  the  people  of  the  North,  using  as  a  pretext  the  slave  ques- 
tion. The  object  in  view  was  the  dissolution  of  the  Union ;  and 
tariff,  slavery,  Texan  annexation  were  welcome  if  their  agitation 
could  be  made  to  increase  distrust  between  the  free  and  the  slave 
States.  This  wicked  propaganda  was  ably  seconded  by  the  reck- 
less abolitionists  in  the  North,  whose  utterances  were  equally  culp- 
able, but  whose  numbers  and  influence  upon  the  people  of  that 
section  as  a  whole  were  so  small  as  to  be  almost  negligible. 

Mr.  Calhoun  died  in  1850,  but  he  left  a  number  of  zealous  fol- 
lowers who  continued  to  preach  his  doctrines  until  they  bore  fruit 
in  the  great  rebellion  of  1861,  and  fully  justified  the  words  of  Gov- 
ernor Gish  of  South  Carolina,  who,  in  his  message  to  the  Legisla- 
ture the  day  before  the  Presidential  election  of  1860,  said :  "The 
long-desired  co-operation  of  the  other  States  having  similar  insti- 
tutions, for  which  so  many  of  our  citizens  have  been  waiting,  seems 
to  be  near  at  hand,  and  if  we  are  true  to  ourselves,  will  soon  be 
realized." 

Mr.  Barnwell  Rhett,  owner  of  the  Charleston  Mercury,  and 
later  chairman  of  the  committee  in  the  convention  at  Montgomery 
by  whom  the  Constitution  of  the  Confederate  States  of  America 
was  reported,  stated  the  plain  truth  when  he  said,  "The  secession 
of  South  Carolina  is  not  an  event  of  a  day.  It  is  not  anything  pro- 
duced by  Mr.  Lincoln's  election,  or  by  the  non-execution  of  the 
Fugitive  Slave  Law.  It  has  been  a  matter  which  has  been  gather- 
ing head  for  thirty  years." 

Mr.  Francis  S.  Parker,  a  member  of  the  South  Carolina  Con- 
vention, said :  "It  is  no  spasmodic  effort  that  has  come  suddenly 
upon  us;  it  has  been  gradually  culimnating  for  a  long  period  of 
thirty  years."  John  A.  Inglis,  chairman  of  the  committee  which 
drew  up  the  Ordinance  of  Secession,  said,  "Most  of  us  have  had 
the  matter  under  consideration  for  the  last  twenty  years." 

Prudence  alone,  born  of  their  failure  to  secure  the  co-operation 
of  other  slave-holding  States  in  1832,  restrained  the  people  of  South 
Carolina  from  another  attempt  to  break  up  the  Union  during  this 
long  period.  Threats  were  made  constantly,  associations  were 
formed,  and  conventions  held  looking  to  disunion.  In  November, 
1859,  the  Legislature  of  South  Carolina  resolved  that  "the  com- 
monwealth was  ready  to  enter  together  with  other  slave-holding 
States,  or  such  as  desire  prompt  action,  into  the  formation  of  a 
Southern  Confederacy." 


[1861]  OF  THE  CITY  OF  CHICAGO  279 

One  method  by  which  the  great  calamity  was  brought  about 
was  outlined  by  Senator  William  L.  Yancey  of  Alabama,  who  wrote 
to  a  friend  in  that  state,  June  15,  1858,  "If  we  could  do  as  our  fathers 
did — organize  'Committees  of  Safety'  all  over  the  Cotton  States 
(and  it  is  only  in  them  that  we  can  hope  for  any  effective  move- 
ment)— we  shall  fire  the  Southern  heart,  instruct  the  Southern 
mind,  give  courage  to  each  other,  and  at  the  proper  moment,  by 
one  organized,  concerted  action,  we  can  precipitate  the  Cotton 
States  into  a  revolution." 

In  pursuance  of  this  plan  "to  instruct  the  Southern  mind"  the 
theory  of  State  sovereignty  which  Mr.  Calhoun  had  elaborated 
from  Mr.  Jefferson's  Kentucky  Resolutions  of  1798  was  instilled 
into  the  minds  of  the  Southern  people ;  and  since  the  failure  of  the 
attempted  "revolution"  of  1861,  volumes  have  been  written  in  the 
vain  attempt  to  prove  that  the  seceding  states  merely  exercised  a 
constitutional  right. 

Notwithstanding  all  the  ingenious  arguments  which  have  been 
used  to  uphold  the  theory  of  "State  Rights"  or  "State  Sovereignty," 
it  may  safely  be  asserted  that  no  President  of  the  United  States  ever 
admitted  its  validity  when  cited  by  his  political  opponents,  and  that 
only  Mr.  Buchanan  failed  to  disregard  it  when  appealed  to  by 
political  associates.  In  1814,  when  Mr.  Madison,  a  "State  Rights" 
president,  suspected  a  plot  to  separate  New  England,  or  a  portion 
thereof,  from  the  Union,  "Executive  agents  were  scattered  over  New 
England  to  search  for  evidences,"  and  "a  regular  officer  was  sent 
to  Hartford  with  assurances  of  support  from  the  New  York  State 
troops  and  the  "fighting  democracy"  of  Connecticut,  to  oversee  the 
deliberations  of  the  twenty-six  elderly  gentlemen  who  were  soon 
to  meet  there  in  convention."  (Cyclopaedia  of  Political  Science, 
John  J.  Lalor,  vol.  I,  p.  625.) 

President  Jackson's  patriotic  course  in  1832  has  already  been 
described.  If  there  were  no  other  argument,  the  absurdity  of  the 
theory  of  State  Supremacy  itself  renders  it  unworthy  of  considera- 
tion. One  or  two  illustrations  will  suffice.  In  1803  the  United 
States  paid  $15,000,000  for  the  Louisiana  territory,  and  it  was 
afterwards  divided  into  States,  and  these  were  admitted  into  the 
Union.  According  to  the  doctrine  of  State  Supremacy  each  one  of 
these  States  which  before  its  admission  to  the  Union  was  under 
the  control  of  Congress,  had  immediately  after  its  admission  the 
constitutional  right  to  secede  from  the  Union,  and  become  an  inde- 
pendent State,  a  province  of  Great  Britain,  a  colony  of  France, 
or  to  form  an  alliance  hostile  to  the  United  States. 

Take  the  case  of  Cuba,  whose  acquisition  was  for  many  years 
a  cardinal  object  of  the  States'  Rights'  party's  policy.  President 
Polk,  through  James  Buchanan,  his  Secretary  of  State,  offered  to 
pay  Spain  one  hundred  million  dollars  for  the  island  of  Cuba,  a 
sum   which  bore  the   same  relation   to  the  wealth  of  the   United 


Y 


280  HISTORY  OF  THE  BOARD  OF  TRADE  [1861] 

States  at  the  time  this  offer  was  made  that  one  and  a  half  billions 
bears  to  its  present  wealth.  And  yet,  according  to  the  States' 
Rights  doctrine,  Cuba,  the  moment  it  was  admitted  to  the  Union 
as  one  of  the  States,  would  have  had  the  constitutional  right  to 
take  itself  out  again  and  set  up  a  government  independent  of  the 
United  States,  and  hostile  thereto,  or  to  resume  its  former  status  as 
a  Spanish  colony. 

A  theory  based  upon  the  manifest  absurdities  involved  in  the 
States'  Rights  doctrine  did  not  appeal  to  the  common  sense  of  the 
people  of  Chicago.  Americans  are  proverbially  patient.  They  had 
watched  with  anxiety  the  progress  of  the  conspiracy  to  break  up 
the  Union ;  they  had  seen  with  indignation  the  secession  of  one 
State  after  another,  and  the  organization  of  a  hostile  Southern  Con- 
federacy. They  had  seen  their  property  seized,  their  citizens  as- 
saulted and  murdered,  their  flag  insulted  and  fired  upon,  the  cap- 
ital of  the  nation  threatened,  a  hostile  army  besieging  Fort  Sumter, 
and  still  they  waited  and  hoped  for  peace. 

On  the  12th  of  April,  1861,  the  echo  of  Beauregard's  guns  in 
Charleston  Harbor  challenged  the  nation  to  avenge  the  insults  to 
its  honor  and  its  flag  or  to  perish  in  disgrace.  Nowhere  was  this 
summons  to  battle  answered  more  loyally  than  in  Chicago;  and 
although  its  military  organizations  were  not  as  well  equipped  as 
those  in  New  York  and  Boston,  they  promptly  responded  to  Presi- 
dent Lincoln's  call  for  75,000  volunteers,  which  was  issued  on  the 
15th  of  April,  the  day  after  Major  Anderson  evacuated  Fort  Sumter. 
In  the  years  following  the  Mexican  War  there  was  considerable 
military  ardor  in  Chicago,  and  in  1860  the  United  States  Zouave 
Cadets  who  had  acquired  great  proficiency  in  the  Zouave  drill  under 
Captain  Elmer  E.  Ellsworth,  made  a  tour  of  the  Eastern  States 
giving  exhibition  drills  in  the  principal  cities.  They  received  un- 
bounded praise,  and  when  they  reached  home  the  Zouaves  were 
the  most  popular  military  organization  in  the  United  States.  The 
organization  was  disbanded  in  October,  1860,  soon  after  their  return 
from  the  East,  but  in  March,  1861,  two  companies  of  Zouaves, 
known  as  Co.  "A"  and  Co.  "B,"  Chicago  Zouaves,  were  organized 
under  Captain  James  R.  Hayden  and  Captain  John  H.  Clybourn, 
respectively.  Captain  Hayden  had  been  first  sergeant  of  the  for- 
mer United  States  Zouave  Cadets. 

The  quota  of  Illinois  under  President  Lincoln's  call  for  75,000 
men  was  six  regiments,  and  on  the  16th  of  April  General  Order 
No.  2  was  issued  from  the  military  headquarters  of  the  State  of 
Illinois  at  Springfield,  calling  for  the  immediate  organization  of 
these  troops.  Under  the  militia  laws  of  the  State  the  Sixtieth  Reg- 
imental District  was  roughly  bounded  by  39th  Street,  Western 
Avenue,  Fullerton  Avenue  and  Lake  Michigan,  a  little  triangle 
extending  north  of  Fullerton  Avenue,  having  for  its  two  other  sides 
the  north  branch  of  the  Chicago  River  and  Western  Avenue.     In 


[1861]  OF  THE  CITY  OF  CHICAGO  281 

this  district,  whose  boundary  lines  were  practically  the  same  as 
the  city  limits,  there  were  ostensibly  two  regimental  organizations, 
the  Sixtieth  Regiment  and  the  Washington  Independent  Regiment. 
These  two  regiments  formed  the  second  brigade  of  the  sixth  divi- 
sion, I.  S.  M.,  under  command  of  Brig.  Gen.  R.  K.  Swift.  Not 
one  of  the  companies  in  either  of  these  regiments  was  of  full  strength 
and  most  of  them  were  without  arms.  Andreas'  vol.  2,  p.  162,  esti- 
mates that  about  50  good  muskets  and  as  many  inferior  rifles  were- 
all  the  small  arms  available  in  Chicago. 

On  the  evening  of  April  18th  a  great  meeting  was  held  in  Bryan 
Hall,  attended  by  representatives  of  the  leading  business  interests 
of  the  city,  prominent  among  whom  were  the  Committee  of  One 
Hundred  from  the  Board  of  Trade.  At  this  meeting  patriotic 
speeches  were  made,  and  within  a  few  minutes  nearly  $90,000 
was  subscribed  toward  the  expense  of  equipping  the  first  volunteers 
from  Chicago,  and  a  War  Finance  Committee  chosen,  among  whom 
were  many  prominent  members  of  the  Board  of  Trade,  including' 
Julian  S.  Rumsey,  L.  P.  Hilliard,  Orrington  Lunt,  B.  F.  Carver, 
P.  L.  Underwood,  George  Armour,  J.  J.  Richards,  John  L.  Hancock, 
E.  I.  Tinkham,  H.  E.  Sargent,  R.  M.  Hough  and  U.  H.  Crosby. 
Several  of  these  members  served  on  the  special  executive  com- 
mittee of  the  full  committee,  and  within  the  next  twenty-four  hours 
$36,000  had  been  raised.  At  this  meeting  the  Bankers'  Commit- 
tee offered  to  advance  $500,000  to  the  State  of  Illinois  that  there 
might  be  no  delay  in  equipping  the  volunteers  for  active  service. 

The  Tribune  of  the  18th  says:  "A  most  stirring  and  patriotic 
scene  took  place  at  the  Board  of  Trade  rooms  yesterday  on  'Change, 
when  the  following  was  unanimosly  passed  :  "Resolved,  That  the 
Board  of  Directors  be  requested  to  purchase  an  American  flag 
and  cause  the  same  to  be  hung  from  the  rooms  of  the  Board  of 
Trade  as  an  emblem  of  our  devotion  to  the  glorious  Stars  and 
Stripes." 

The  next  day  which,  it  will  be  remembered,  was  the  date  of  the 
attack  upon  the  Sixth  Massachusetts  Regiment  as  it  was  passing  ^ 
through  Baltimore  on  its  way  to  the  National  capital.  Governor 
Yates  ordered  General  Swift  to  "have  as  strong  a  force  as  you 
can  raise  ready  to  march  at  a  moment's  warning."  On  the  21st 
of  April  Companies  "A"  and  "B,"  Chicago  Zouaves,  the  "Chicago 
Turngemeinde"  Company,  "Chicago  Light  Infantry,"  under  Cap- 
tain Harding,  the  "Lincoln  Rifles,"  under  Captain  Mihalotzy,  and 
the  "Chicago  Light  Artillery"  under  Captain  James  Smith,  the  lat- 
ter armed  with  four  six-pound  guns,  left  Chicago  for  Cairo,  Illinois. 
A  number  of  young  men  connected  with  the  Board  of  Trade  en- 
listed in  this  battery  of  artillery,  among  them  being  John  W.  Rum- 
sey, who  rose  to  command  of  the  battery,  and  was  severely  wounded 
at  the  battle  of  Resaca.  The  entire  force,  aggregating  595  men, 
was  under  command  of  Brigadier  General  Swift.    To  this  Chicago 


282  HISTORY  OF  THE  BOARD  OF  TRADE  [1861] 

detachment  belongs  the  honor  of  being  the  first  military  force  in    / 
the  West  which  took  the  field  in  defense  of  the  Union. 

On  the  24th  of  April,  before  any  armed  volunteers  except  the 
Sixth  Massachusetts  Infantry  had  reached  the  beleaguered  Capital 
of  the  Nation,  the  Chicago  Light  Artillery,  known  later  as  "Battery 
A,"  First  Illinois  Light  Artillery,  intercepted,  just  above  Cairo,  the 
steamers  Baltic  and  C.  E.  Hillman  which  were  conveying  muni- 
tions of  war  from  St.  Louis  to  the  Confederates  in  the  South.  It 
is  claimed  that  the  shots  from  this  battery  at  this  time  were  the 
first  shots  fired  from  a  field  gun  by  the  Union  troops  during  the 
Civil  War. 

It  quickly  became  apparent  to  the  authorities  at  Washington 
and  to  the  people  that  the  75,000  three-months'  men  called  for  by 
Mr.  Lincoln  on  the  14th  of  April  was  a  force  entirely  inadequate  to 
perform  the  task  allotted  to  it,  and  on  the  3d  of  May  he  asked  for 
about  45,000  more  to  serve  "for  three  years  or  during  the  war." 
Under  this  call  old  Battery  B,  Chicago  Light  Artillery,  which  had 
been  organized  previously,  was  accepted  by  the  Governor,  mustered 
into  the  service  of  the  United  States,  and  on  the  1st  of  June  pro- 
ceeded to  Cairo.  It  carried  four  six-pound  field  pieces  and  two 
twelve-pound  howitzers.  Captain  Ezra  Taylor  was  in  command 
of  this  famous  organization,  and  a  member  of  the  Board  of  Trade 
who  commanded  it  after  Captain  Taylor's  promotion  was  Israel  P. 
Rumsey,  who  went  to  the  front  as  junior  second  lieutenant,  and 
after  the  war  conducted  a  very  successful  commission  business  on 
the  Board  of  Trade. 

About  a  month  after  the  fall  of  Fort  Sumter  the  confusion  in 
the  currency  resulting  from  the  depreciation  in  value  of  Southern 
securities  became  so  serious  as  to  threaten  general  demoralization 
of  business  in  the  city.  These  securities  declined  day  by  day,  and 
the  Tribune  of  April  18th  says,  "So  the  tumble  goes  on,  and  where 
it  is  to  stop  nobody  can  guess.  Under  it  the  brokers  bought  un- 
current  Illinois  and  Wisconsin  at  40  cents.  It  has  declined  10  cents 
per  day  for  the  last  three  days.  It  must  find  a  landing  place  at 
nothing  in  a  very  few  days  more." 

The  State  authorities  were  afraid  to  call  upon  banks  whose 
assets  consisted  largely  of  depreciated  securities  to  make  good  the 
fall  in  price  of  these  bonds  or  stocks  against  which  bank  notes  had 
been  issued,  lest  the  inability  of  the  banks  to  respond  promptly  to 
the  sudden  demand  should  cause  widespread  bankruptcy.  Bank 
notes  issued  by  banks  which  had  deposited  with  the  State  Treasurer 
as  collateral  security  for  the  redemption  of  their  bills,  bonds  of  the 
United  States  or  of  a  Northern  State,  circulated  at  par,  and  were 
known  as  the  "Short  list,"  while  those  bank  issues  which  had 
behind  them  only  depreciated  Southern  bonds  declined  from  day 
to  day,  and  were  known  as  the  "long  list."  The  banks  published 
daily  bulletins  of  the  constantly  changing  values   of  the   various 


[1861]  OF  THE  CITY  OF  CHICAGO  283 

State  bank  issues,  and  the  rate  at  which  they  would  be  taken  on 
deposit  or  on  payment  for  the  day.  The  railroad  companies,  the 
Merchants'  Association,  and  the  lumbermen  also  had  their  private 
lists,  all  differing  from  that  of  the  banks,  and  each  differing  from 
the  other.  (Andreas,  vol.  2,  p.  337.)  Complete  stagnation  of  busi- 
ness was  threatened  when,  a  few  weeks  later,  the  Board  of  Trade, 
true  to  its  traditions,  took  the  lead  in  an  effort  to  bring  some  meas- 
ure of  order  out  of  the  existing  chaos.  Some  favored  an  attempt  to 
establish  a  general  system  of  banking  on  a  specie  basis ;  but  at  a 
full  meeting  of  the  Board  of  Trade  held  on  the  16th  of  May  this 
plan  was  voted  down  and  a  resolution  offered  by  Julian  S.  Rumsey, 
Mayor  of  Chicago,  and  former  President  of  the  Board  of  Trade,  was 
adopted,  inviting  each  of  the  following  business  interests  to  select 
a  committee  of  ten  to  confer  with  a  similar  committee  of  the  Board 
of  Trade,  viz. :  The  Merchants'  Association,  the  lumber  dealers, 
the  railroads,  the  city  banks,  and  the  country  banks.  Julian  S.  Rum- 
sey, E.  G.  Wolcott,  Clinton  Briggs,  N.  K.  Fairbank,  W.  D.  Hough- 
teling,  A.  E.  Kent,  Charles  Randolph,  George  Watson,  Mr. 
McChesney  and  Mr.  Curtiss  composed  the  Board  of  Trade  com- 
mittee. 

The  committee  met  on  Monday  afternoon.  May  20th,  and 
agreed  upon  a  list  of  31  banks  whose  notes  should  be  taken  at 
par,  and  another  list  of  banks  whose  notes  should  become  current 
as  soon  as  bonds  of  the  United  States,  or  of  a  Northern  State,  to 
the  value  of  ninety  per  cent  of  their  outstanding  currency  should 
be  deposited  with  the  State  Treasurer  by  such  banks.  This  action 
was  ratified  by  the  Board  of  Trade  at  a  meeting  held  the  same 
evening,  and  the  business  men  of  the  city  were  encouraged  by  this 
compromise.  Like  many  compromises,  however,  this  one  settled 
nothing,  and  for  a  few  days  the  confusion  was  greater  than  ever. 
Some  of  the  banks  in  the  so-called  "Union  list"  of  thirty-one 
"good"  banks,  failed,  and  on  the  23rd  of  May  the  Board  of  Trade 
adopted  the  following  resolution : 

"Whereas,  The  recent  events  in  the  moneyed  affairs  of  Chi- 
cago have  culminated  in  a  return  to  a  standard  of  gold  and  silver; 
therefore 

"Resolved,  That  in  the  opinion  of  the  Board  of  Trade  of  Chi- 
cago, all  sales  of  property  and  daily  quotations  thereof  should  here- 
after be  made  in  funds  equal  to  specie." 

This  wise  action  put  the  business  of  the  Board  of  Trade  upon 
a  specie  basis  and  gold  coin  was  the  standard  of  value  in  all  com- 
mercial transactions  in  Chicago  from  this  time  until  the  suspen- 
sion of  specie  payments  by  the  banks  of  New  York,  December  30, 
1861,  put  a  premium  on  gold,  and  made  the  United  States  demand 
notes,  and  later  the  legal  tender  notes,  or  "greenbacks,"  which  were 
authorized  by  Congress  February  25,  1862,  the  standard  of  all 
values. 


284  HISTORY  OF  THE  BOARD  OF  TRADE  [1861J 

Military  operations  in  1861  resulted  on  the  whole  in  favor  of 
the  Confederates.  General  McClellan's  successes  in  West  Vir- 
ginia in  the  early  part  of  July  were  more  than  offset  by  the  disaster 
at  Bull  Run  on  the  21st  of  that  month;  and  the  costly  defeat  at 
Balls  Bluff  in  October  was  not  atoned  for  by  General  Grant's  vic- 
tory at  Belmont  in  the  following  month.  Roughly  speaking,  the 
Union  troops  and  the  Confederates  each  held  at  the  close  of  the  year 
about  half  of  Missouri,  Kentucky  and  West  Virginia,  while  the 
safety  of  Washington  was  still  menaced  by  a  Confederate  army  at 
Manassas  thirty  miles  away,  whose  intrenchments  General  McClel- 
lan  deemed  his  force  insufficient  to  assault  with  a  prospect  of 
victory. 

On  the  10th  of  August,  1861,  the  War  Finance  Committee 
elected  at  the  great  meeting  in  Bryan  Hall,  April  18,  was  relieved 
at  the  earnest  request  of  its  members,  and  its  duties  assumed  by  the 
Union  Defense  Committee,  composed  in  part  of  members  of  the 
Board  of  Trade. 

Congress,  on  the  22d  of  July,  1861,  authorized  President  Lin- 
coln to  call  for  500,000  men,  and  among  the  Illinois  regiments 
organized  and  accepted  under  this  call  was  the  Thirty-seventh 
Infantry,  two  companies  of  which  were  raised  in  Chicago  and 
two  in  Lake  County.  This  regiment,  known  also  as  the  "Fre- 
mont Rifles,"  under  Col.  Julius  White,  a  member  of  the  Board 
of  Trade,  who  had  resigned  his  position  as  Collector  of  the  Port  of 
Chicago  to  fight  in  defense  of  his  country,  rendezvoused  at  Camp 
Webb  in  Wright's  Grove  just  north  of  Fullerton  avenue.  On  the 
19th  of  September  the  regiment  entrained  for  St.  Louis,  halting 
on  their  march  from  camp  to  the  Illinois  Central  station  long 
enough  to  receive  at  the  rooms  of  the  Board  of  Trade  a  beautiful 
banner,  upon  one  side  of  which  Mr.  G.  P.  A.  Healy,  the  famous  artist, 
had  painted  a  portrait  of  General  John  C.  Fremont.  Speeches  were 
made  by  Mr.  Clary,  President  of  the  Board  of  Trade,  for  the  organi- 
zation, and  by  Mr.  J.  C.  Wright  for  the  donors,  and  by  Colonel 
White,  who  accepted  the  banner  on  behalf  of  the  regiment. 
Colonel  White  closed  with  these  words : 

"And  now.  Sir,  I  give  you  my  hand  to  bid  you  farewell,  and 
through  you  the  members  of  your  Board,  who  have  honored  me, 
and  the  soldiers  under  me,  with  your  confidence,  and  made  us  the 
recipients  of  this  banner,  and  entrusted  us  with  its  protection.  We 
may  never  meet  again  ;  if  we  do  not,  be  assured  we  will  not  dishonor 
you  or  your  gifts.     Farewell." 

Throughout  the  first  year  of  the  war,  the  Board  of  Trade  as 
an  organization,  and  its  members  as  individuals,  contributed  gener- 
ously of  their  time  and  means  to  the  work  of  organizing  and  equip- 
ping the  Chicago  volunteers  for  active  service,  and  to  the  equally 
necessary  provision  for  the  dependent  ones  whom  the  soldiers  had 
left  at  home. 


11861]  OF  THE  CITY  OF  CHICAGO  285 

On  the  8th  of  November,  1861,  Jamey^  M.  Mason  and  John 
Slidell,  envoys  of  the  Confederate  States  to  Great  Britain  and 
France,  were  taken  by  force  from  the  Britis-h  mail  steamship  "Trent" 
by  Captain  Charles  Wilkes  of  the  United  States  frigate  "San 
Jacinto,"  and  brought  to  Boston,  where  they  were  imprisoned  in 
Fort  Warren.  As  Captain  Wilkes  had  merely  exercised  the  right 
of  search  for  which  Great  Britain  had  always  contended,  it  was  at 
first  hoped  that  no  serious  complications  would  ensue.  On  the 
16th  of  December,  however,  the  country  was  startled  by  intelligence 
that  the  British  Government  had  determined  to  demand  the  release 
■of  Mason  and  Slidell,  and  an  apology  for  their  arrest  by  Captain 
Wilkes.  Fear  of  war  with  England  caused  a  fall  in  securities, 
increased  the  financial  embarrassment  of  the  United  States  Treas- 
ury, and  contributed  in  no  small  degree  to  the  suspension  of  specie 
payments  by  the  New  York  banks  on  the  30th  of  December.  From 
that  time  until  the  close  of  the  war  (and  for  many  years  thereafter) 
gold  commanded  a  price  which,  measured  in  greenbacks,  the 
standard,  ranged  in  1862  between  1.02  and  1.32;  in  1863  between 
1.25  and  1.60;  and  in  1864  between  1.55  and  2.58,  the  highest 
price  being  in  July  and  August  of  the  latter  year  (D.  R.  Dewey's 
Financial  History  of  the  United  States,  p.  295),  when  General 
Grant's  investment  of  Richmond  dashed  the  hopes  of  an  immediate 
close  of  the  war,  which  his  successes  in  the  Wilderness  and  at 
Spottsylvania  had  inspired. 

The  southern  markets,  in  which  much  surplus  produce  of  the 
Northwest  had  found  an  outlet,  were  closed  by  the  war,  and  the 
grain  and  provision  trade  of  Chicago  was  compelled  to  seek  new 
channels.  But  Mr.  Catlin,  the  Secretary  of  the  Board  of  Trade, 
in  his  review  of  the  year  1861,  says:  "At  no  time  since  its  inaugu- 
ration has  the  Board  been  in  so  flourishing  a  condition  as  at  present." 
*  *  *  "Its  members  number  over  800.  Quite  a  number  of  firms 
from  Cincinnati,  St.  Louis  and  other  points  have  come  to  Chicago, 
transferring  most  of  their  business  to  this  place."  He  congratulates 
the  Board  upon  the  inauguration  of  a  system  of  flour  inspection 
during  the  year  1861,  and  upon  the  increasing  proportion  of  the 
receipts  of  grain  passed  upon  by  the  inspectors.  The  receipts  of 
grain  during  the  years  1860  and  1861  showed  an  enormous  increase 
over  previous  years  and  during  the  latter  years  almost  all  arrivals 
were  inspected.  The  year  1860  was  long  remembered  as  a  year  of 
abundant  harvests  throughout  the  region  tributary  to  Chicago, 
which  at  the  close  of  1861  had  railroad  communication  as  far  north 
as  Appleton,  Wisconsin,  as  far  south  as  Memphis  and  New  Orleans, 
and  which  reached  the  Mississippi  River  at  Prairie  du  Chien, 
Dubuque,  Clinton,  Rock  Island,  Burlington,  Quincy,  Alton  and 
St.  Louis.  The  Illinois  Central  was  pushing  its  line  westward 
from  Dubuque;  the  Galena  &  Chicago  Union  was  soon  (in  the  sum- 
mer of  1862)  to  be  in  control  of  a  direct  line  to  Marshalltown,  Iowa, 


"A" 


286  HISTORY  OF  THE  BOARD  OF  TRADE  [1861} 

and  the  Chicago  &  Rock  Island  continued  work  upon  its  projected 
extension  to  the  western  boundary  of  the  State  of  Iowa  at  Council 
Bluffs. 

Although  the  yield  per  acre  was  smaller  in  1861,  and  the  small 
grains  damaged  by  rains,  Mr.  Catlin  expressed  the  opinion  that 
"increased  acreage  will  nearly,  or  quite,  make  up  for  the  smaller 
average  yield."  He  gives  the  following  figures,  which  are  of 
interest : 

In  1858  received  14,032,291  bushels.  Inspected     7,294,600  bushels. 

In  1859  received  14,728,542  bushels.  Inspected    8,987,806  bushels. 

In  1860  received  32,824,958  bushels.  Inspected  27,101,768  bushels. 

In  1861  received  45,970,687  bushels.  Inspected  43,870,065  bushels. 

He  says:  "The  largely  increased  trade  this  season  (1861)  is 
owing  somewhat  to  the  receipts  of  products  which  have  usually 
found  a  southern  market  via  St.  Louis  and  other  points,  but  mainly 
to  the  largely  increased  crop  of  the  country  tributary  to  us." 

The  elevator  capacity  of  Chicago  at  the  close  of  the  year  1861 
was  as  follows  in  bushels :  Sturges,  Buckingham  &  Co.  "A 
(Illinois  Central),  700,000;  Sturges,  Buckingham  &  Co.  "B 
(Illinois  Central),  700,000;  Flint  &  Thompson,  160,000;  Flint  & 
Thompson  (R.  I.  R.  R.),  700,000;  Charles  Wheeler  &  Co.  (G.  &  C. 
U.  R.  R.),  500,000;  Hunger  &  Armour,  600,000;  Hiram  Wheeler, 
450,000;  Munn  &  Scott,  200,000;  Orrington,  Lunt  &  Bro.,  80,000; 
Ford  &  Norton,  100,000 ;  Geo.  Sturges  &  Co.,  Fulton  elevator,  100,- 
000;  Walker,  Washburn  &  Co.,  75,000;  Sturges,  Smith  &  Co., 
700,000;  Armour,  Dole  &  Co.,  850,000.    Total,  5,915,000. 

In  another  summary  Mr.  Catlin  gives  the  receipts  and  ship- 
ments of  the  leading  cereals  in  1861,  as  follows:  Receipts — Wheat, 
17,385,002;  corn,  26,369,989;  oats,  2,067,018;  rye,  490,989;  barley, 
457,589;  flour,  barrels,  1,479,284.  Shipments— Wheat,  15,835,953; 
corn,  24,372,725;  oats,  1,633,237;  rye,  393,813;  barley,  226,534;  flour, 
barrels,  1,603,920.  The  excess  in  shipments  of  flour  over  receipts 
of  the  same  is  explained  by  the  fact  that  291,852  barrels  were  manu- 
factured during  the  year  by  the  twelve  flour  mills  then  in  operation 
in  Chicago,  of  which  Adams'  mills,  the  largest,  is  credited  with  hav- 
ing produced  60,000  barrels,  and  Marple  &  Cole  45,000. 

An  examination  of  the  inspection  reports  shows  that  about 
1,100,000  bushels  of  the  wheat  received  during  the  year  was  winter 
wheat  of  diiTerent  grades  (principally  red  winter),  and  the 
remainder,  spring  wheat,  of  which  6,772,718  bushels  was  No.  1 
spring  wheat,  7,006,716  bushels  No.  2  spring  wheat,  and  1,813,588 
bushels  rejected  spring  wheat. 

It  is  interesting  to  note  that  in  1861  about  200,000  bushels  of 
wheat,  100,000  bushels  of  corn,  and  500,000  bushels  of  oats  were 
received  from  farmers'  teams.  Of  the  wheat  received  during  the 
year,  Galena  &  Chicago  Union  Railroad  brought  about  two-fifths. 


[1861]  OF  THE  CITY  OF  CHICAGO  287 

while  the  Illinois  &  Michigan  Canal,  which  carried  very  little  wheat,, 
brought  in  11,735,043  bushels  of  corn,  or  more  than  two-fifths  of 
the  total  of  that  grain. 

During  the  early  part  of  the  year  1861  the  price  of  wheat  in 
Chicago  fluctuated  very  little,  the  lowest  price  quoted  for  No.  2 
spring  wheat  between  January  1  and  March  1  being  73^  cents 
per  bushel  in  February,  and  the  highest  80  cents  per  bushel  towards 
the  close  of  March.  About  the  middle  of  May  there  was  a  sudden 
advance  to  $1.25  per  bushel,  due  perhaps  to  the  disordered  currency, 
and  a  still  more  sudden  decline  the  next  week  to  70  cents.  In  the 
latter  part  of  June  the  bottom  of  the  depression  was  reached  at  55 
cents,  and  the  price  did  not  rise  above  75  cents  again  during  the 
year. 

Secretary  Catlin  speaks  of  "the  unprecedented  crop  of  corn  in 
1860,  followed  by  a  large  one  in  1861,"  and  gives  this  as  a  reason 
why  the  receipts  of  this  grain  in  1861  exceeded  the  arrivals  in  any 
former  year  by  10,767,809  bushels.  It  explains,  too,  the  low  price 
which  prevailed.  The  lowest  quotation  for  "mixed"  corn  during 
the  year  was  20  cents  per  bushel  in  September  and  October  and  the 
highest  45  cents  in  May. 

The  oats  trade  was  of  small  proportions,  and  would  have  been 
still  smaller  but  for  the  demands  of  the  army.  Prices  were  low 
throughout  the  season,  minimum  quotations  for  No.  1  oats  being 
llyi  cents  per  bushel  in  June  and  13  cents  in  September,  while 
24  cents  in  May  was  the  highest  price  of  the  year. 

No.  1  rye  sold  as  low  as  23  cents  per  bushel  in  August  and 
September  and  as  high  as  50  cents  in  May. 

No.  2  barley  sold  as  high  as  33  cents  per  bushel  in  the  early 
part  of  the  year,  and  as  low  as  15  cents  in  November. 

The  Provision  Trade 

Receipts  of  hogs  in  1861  showed  an  increase  of  20  per  cent 
over  any  preceding  year,  and  nearly  one-fifth  of  them  had  been 
slaughtered  by  farmers  in  the  cold  weather  and  shipped  to  market 
in  a  frozen  condition.  Prices  of  live  hogs,  which  reached  $5.50  per 
hundred  pounds  in  January,  declined  to  $2.30  in  December.  The 
receipts  of  hogs  for  the  year  were  675,902  and  the  shipments 
289,094. 

The  increased  supply  of  cattle  showed  a  smaller  percentage  of 
gain  than  the  receipts  of  hogs.  Choice  cattle  were  highest  in  April, 
May  and  June,  when  they  were  quoted  at  $4  per  hundred  pounds, 
and  lowest  in  October  at  $2.50.  Total  receipts  of  cattle  in  1861  were 
204,579.  Total  shipments  of  cattle  in  1861  were  124,146.  During 
the  year  1861  thirty-nine  packing  firms  slaughtered  379,903  hogs, 
and  ten  of  these  firms  packed  cattle  to  the  number  of  53,754. 

The  price  of  provisions  was  highest  in  the  latter  part  of  April, 
when  mess  pork  was  quoted  $21  per  barrel,  and  lard  11>^  cents  per 


288  HISTORY  OF  THE  BOARD  OF  TRADE  [1861] 

pound.  The  only  packers  credited  with  packing  more  than  30,000 
hogs  were:  Kreigh  &  Harbach,  44,120;  Cragin  &  Co.,  37,700; 
R.  M.  &  O.  S.  Hough,  34,114;  A.  E.  Kent  &  Co.,  30,000,  and  the  only 
firm  which  packed  more  than  8,000  cattle  was  Cragin  &  Co.,  who 
packed  24,630,  or  nearly  one-half  of  the  total. 

Lumber 

The  lumber  trade  was  smaller  in  1861  than  in  any  one  of  the 
preceding  five  years,  receipts  being  249,309,000  square  feet,  of  which 
about  one-fifth  came  from  Muskegon,  Michigan,  and  most  of  the 
remainder  from  other  ports  on  Lake  Michigan  and  Green  Bay. 

Coal  and  Wood 

Although  wood  continued  in  use  as  fuel  for  some  years  after 
the  Civil  War,  and  the  amount  received  actually  showed  an  increase, 
coal  had  begun  to  supplant  it  even  before  the  war  began.  The  fol- 
lowing table  shows  that  while  the  receipts  of  firewood  increased  less 
than  20  per  cent  between  1857  and  1865,  the  receipts  of  coal  increased 
nearly  90  per  cent. 

Received                                           Wood,  Cords  Coal,  Tons 

1857 126,029  171,379 

1858 95,948  87,290 

1859 114,352  131,204 

1860 83,071  131,080 

1861 93.070  184,089 

1862 101,781  218,423 

1863-4 110,793  284,196 

1864-5 149,312  323,275 

Other  Articles  of  Commerce 

The  growing  trade  in  seeds,  salt,  hides  and  other  articles  is 
shown  by  the  following  tables  of  receipts  and  shipments  in  the  years 
named : 

Seeds 
Received  Shipped 

Pounds  Pounds 

1857 2,466,973         1857 1,537,948 

1858 4,271,732        1858 4,027,846 

1859 5,241,547        1859 4,647,960 

1860 7,071,074        1860 6,055,563 

1861 7,742,614        1861 7,438,485 

1862 8.176,349        1862 6,185,221 

1863-4 9,885,208        1863-4 7,754,656 

1864-5 10,180,781        1864-5 11,782,656 


[1862]  OF  THE  CITY  OF  CHICAGO  289 

Salt 

Received  Shipped 

Barrels  Barrels 

1861 390,499        1861 319,140 

1862 612,003         1862 520,227 

1863-4 775,364        1863-4 579,694 

1864-5 680,346        1864-5 483,448 

Hides 

Received  Shipped 

Pounds  Pounds 

1861 9,962,723  1861 12,277,518 

1862 12,747,123  1862 15,315,359 

1863-4 17,557,728  1863-4 23,781,979 

1864-5 20,052,235  1864-5 27,656,926 

High  Wines 
Received  Shipped 

Barrels  Barrels 

1861 89,915  1861 111,240 

1862 61,703  1862 100,170 

1863-4 137,947  1863-4 159,312 

1864-5 102,032  1864-5 138,644 

"War  prices"  certainly  prevailed  in  the  transportation  business 
in  1861,  the  lowest  lake  freight  on  wheat  to  Buffalo  being-  5^c  per 
bushel  in  July,  and  the  highest  23c  a  bushel  in  October.  Rail 
freights  to  New  York  were  as  low  as  53  cents  per  hundred  pounds 
in  July  and  as  high  as  97^  cents  in  October,  November  and 
December. 

1862 

Although  no  armed  resistance  was  offered  by  the  govern- 
ment of  the  United  States  to  the  Secessionists  until  they  bom- 
barded Fort  Sumter,  many  acts  of  war  had  been  committed  by 
them  before  that  time.  Perhaps  the  most  flagrant  of  these  was  the 
attack  upon  the  unarmed  steamer  Star  of  the  West,  carrying  re- 
inforcements to  Fort  Sumter,  on  the  9th  of  January,  1861.  This 
was  the  beginning  of  the  war,  rather  than  the  assault  upon  Fort 
Sumter,  unless,  indeed,  the  seizure  of  Fort  Moultrie,  Castle  Pinck- 
ney  and  the  United  States  Arsenal  at  Charleston  during  the  last 
days  of  December,  1860,  should  be  so  considered.  In  either  case, 
January,  1862,  may  be  looked  upon  as  the  beginning  of  the  second 
year  of  the  great  war. 

The  financial  outlook  at  the  beginning  of  the  year  was  dis- 
couraging. The  suspension  of  specie  payments  by  the  New  York 
banks  compelled  the  United  States  Government  to  take  similar 
action  on  the  1st  of  January,  1862.    For  several  months  the  premium 


290  HISTORY  OF  THE  BOARD  OF  TRADE  [1862] 

on  gold  was  not  sufficient  to  cause  general  alarm.  The  Secretary 
of  the  Treasury,  in  his  report  which  reached  Congress  on  the  10th 
of  December,  had  outlined  a  plan  for  a  system  of  national  banks, 
but  "it  was  apparent  that  this  system  could  not  be  organized  and 
put  in  effective  force  for  a  year  or  more,"  and  that  something  must 
be  done  at  once. 

On  the  7th  day  of  January,  1862,  Mr.  Elbridge  G.  Spaulding  of 
New  York,  chairman  of  a  sub-committee  of  the  Committee  of  Ways 
and  Means  of  the  House  of  Representatives,  reported  the  bill, 
which  with  some  important  modifications  afterwards  became  the 
famous  Legal  Tender  Act  of  February  25,  1862.  Secretary  Chase 
was  fully  aware  of  the  serious  objections  to  this  measure,  but  he 
finally  gave  it  his  approval  because  the  public  exigencies  required 
it.  It  was  upon  this  ground,  too,  that  the  leaders  of  the  Repub- 
lican party  in  Congress  supported  it,  although  some  doubted  its 
constitutionality  and  others  its  expediency.  As  'to  the  urgent 
necessity  of  immediate  action  as  seen  by  Lord  Palmerston,  the 
English  premier,  an  article  which  appeared  in  his  organ,  the  Lon- 
don "Post,"  on  the  15th  of  January,  1862,  is  worthy  of  note.  It 
reads,  in  part :  "The  monetary  intelligence  from  America  is  of  the 
most  important  kind.  National  bankruptcy  is  not  an  agreeable 
prospect,  but  it  is  the  only  one  presented  by  the  existing  state  of 
American  finance."     (J.  Sherman's  Recollections,  p.  228.) 

The  Legal  Tender  Act  encountered  vigorous  opposition  in 
Congress  and  was  debated  at  great  length ;  but  the  Board  of  Trade 
threw  its  influence  in  favor  of  the  measure  and  on  the  10th  of 
February  telegraphed  the  Illinois  Senators  at  Washington  urging 
favorable  action  upon  this  vitally  important  measure. 

An  effort  was  made  in  the  winter  of  1861-1862  to  repeal  the 
Canadian  Reciprocity  Treaty.  The  Board  of  Trade  opposed  the 
repeal,  and  on  February  10,  1862,  adopted  the  following  memorial, 
which  was  sent  to  the  Congress : 

"The  Board  of  Trade  of  the  City  of  Chicago,  Illinois,  would 
respectfully  remonstrate  against  any  action  suspending  or  repeal- 
ing that  treaty  between  the  United  States  and  Great  Britain,  known 
as  the  reciprocity  treaty,  believing  that  its  repeal  or  abrogation 
would  materially  affect  the  producing  interests  of  the  entire 
Northwest." 

Ever  since  its  completion  in  1848,  the  Illinois  and  Michigan 
Canal  had  been  a  potent  factor  in  the  growth  of  Chicago,  and  on 
the  10th  of  February,  1862,  the  Board  of  Trade  selected  a  com- 
mittee to  draw  up  a  memorial  to  Congress  for  the  enlargement  and 
improvement  of  this  great  waterway. 

General  Thomas'  victory  over  the  Confederates  at  Mill  Springs 
in  January  was  soon  followed  by  General  Grant's  capture  of  Fort 
Donelson  with  nearly  15,000  prisoners  on  the  16th  of  February, 
1862.    The  news  of  General  Grant's  triumph  was  received  in  Chi- 


[1862]  OF  THE  CITY  OF  CHICAGO  291 

cago  on  the  following  day  and  announced  on  'Change  at  noon. 
Business  was  suspended,  and  the  Board  opened  its  rooms  to  wel- 
come every  citizen  who  rejoiced  over  the  glad  tidings.  It  was, 
however,  called  to  order  long  enough  to  pass  the  following  reso- 
lution : 

"Resolved,  That  this  Board  hears,  with  pride  and  heartfelt 
thanks,  the  glorious  news  of  the  success  of  our  troops  in  the  cap- 
ture of  the  rebel  stronghold,  Fort  Donelson.  That  we  tender 
the  thanks  of  this  Board,  also  of  all  loyal  citizens  of  this  city,  to 
the  commanding  officers  and  their  commands,  for  their  triumphant 
efforts  to  plant  the  Stars  and  Stripes  over  the  same,  and  that  we 
do  particularly  thank  our  gallant  battery,  Co.  'B,'  Chicago  Light 
Artillery,  for  their  daring  and  successful  courage,  displayed  on 
the  fields  of  Frederickton,  Belmont  and  Fort  Donelson. 

"Resolved,  That  the  President  of  this  Board  be  requested  to 
forward  these  resolutions  to  the  commanding  officers  of  the  expe- 
dition and  a  copy  to  Captain  Ezra  Taylor,  Chicago  Light  Artillery, 
Co.  'B.'" 

At  this  meeting,  N.  K.  Fairbank,  Gurdon  S.  Hubbard,  A.  E. 
Kent  and  W.  D.  Houghteling  were  appointed  to  act  as  a  Relief 
Committee  in  conjunction  with  the  Chicago  Sanitary  Commission, 
which  was  organized  in  the  preceding  October.  (Andreas  II,  p. 
338.) 

The  great  battle  of  Pittsburg  Landing,  or  Shiloh,  was  fought 
on  the  6th  and  7th  of  April.  News  of  the  engagement  reached 
Chicago  on  the  9th,  and  on  that  day  an  appeal  for  hospital  supplies, 
surgeons  and  nurses  came  from  Brigadier  General  Strong,  Com- 
mandant at  Cairo.  The  Board  of  Trade  responded  with  contribu- 
tions aggregating  nearly  $3,000,  and  the  same  evennig  a  large 
number  of  surgeons  and  nurses  left  Chicago  for  the  battlefield. 
Nearly  a  thousand  packages  of  sanitary  stores  had  been  accumu- 
lated at  Cairo  by  the  Chicago  Sanitary  Commission  in  anticipation 
of  the  battle,  and  these,  together  with  the  recent  contributions, 
were  hurried  forward  from  that  point  by  steamers  on  the  Tennessee 
River.  Although  they  did  not  arrive  at  Pittsburg  Landing  until 
the  afternoon  of  the  11th,  four  days  after  the  close  of  the  second 
day's  battle,  these  sanitary  supplies  were  the  first  voluntary  con- 
tributions which  reached  our  wounded  soldiers. 

The  fourteenth  annual  meeting  of  the  Board  of  Trade  was  held 
April  7,  1862.  C.  T.  Wheeler  was  elected  President;  Asa  Dow, 
First  Vice-President,  and  J.  L.  Hancock,  Second  Vice-President. 
The  report  of  the  Directors  showed  that  about  $5,000  out  of  the 
total  receipts  of  $25,000  had  been  disbursed  for  war  purposes. 

Much  of  the  wheat  crop  of  1861  reached  the  Chicago  market 
in  bad  condition  on  account  of  heavy  rains  during  the  harvest  of 
that  year.  Some  of  the  "mixers,"  it  was  claimed  bought  this  musty 
or  sprouted  wheat,  dried  it,  scoured  it,  subjected  it  to  an  air  blast, 


292  HISTORY  OF  THE  BOARD  OF  TRADE  [1862] 

mixed  it  with  other  wheat,  and  in  some  way  got  inspectors  to  pass 
it,  and  secured  its  admission  to  the  elevators  as  merchantable  wheat. 
So  much  of  this  inferior  wheat  found  its  way  to  eastern  markets 
that  the  reputation  of  Chicago  wheat  was  seriously  injured.  The 
best  grades  of  Chicago  wheat  were  sold  in  New  York  as  "Racine," 
or  "Milwaukee  Club,"  and  only  the  poorest  as  "Chicago  spring 
wheat." 

So  many  charges  were  made  of  laxity  in  inspection,  and  of 
fraud  on  the  part  of  elevator  proprietors  and  wheat  mixers  that 
on  the  25th  of  October,  1861,  the  Board  of  Trade  appointed  a  com- 
mittee to  investigate  the  matter  and  report  the  facts  to  the  Board, 
together  with  their  recommendations  as  to  a  remedy  for  such 
evils  as  they  should  find.  This  committee,  of  which  Mr.  Joseph 
Wright  was  chairman,  made  a  report  to  the  annual  meeting  of 
April  7,  1862,  recommending  that  all  grain  bagged  on  the  track 
should  be  refused  admission  to  the  regular  warehouses,  and  that 
the  names  of  any  members  guilty  of  frauds  should  be  posted  on  the 
bulletin  board  together  with  a  statement  of  the  facts  in  the  case. 
The  annual  meeting  adopted  the  report ;  the  Board  of  Directors  on 
the  25th  of  April  passed  the  necessary  resolutions  to  enforce  this 
action  and  the  warehousemen  pledged  themselves  to  observe  the 
new  rules.  It  was  rumored,  however,  that  the  committee  had  found 
evidence  implicating  some  of  the  warehousemen  in  questionable 
practices,  and  the  Chicago  "Tribune"  so  charged.  The  warehouse- 
men demanded  a  full  investigation  and  the  expulsion  of  the 
"Tribune"  representatives  from  the  privileges  of  the  Board.  A 
special  meeting  was  held  on  the  2d  of  May  to  consider  the  subject, 
but  as  the  chairman  of  the  committee  refused  to  divulge  the 
evidence  which  he  claimed  had  been  given  under  pledge  of  secrecy, 
nothing  was  done. 

A  special  meeting  of  the  Board  was  held  on  Friday  evening, 
May  16,  to  act  upon  a  petition  which  had  received  many  signatures, 
asking  for  the  adoption  of  a  resolution  to  require  every  member, 
or  applicant  for  membership  in  the  Board  of  Trade,  to  take  an  oath 
of  allegiance  to  the  United  States.  After  considerable  discussion, 
it  was  recognized  that  the  rules  of  the  Board  would  not  permit  the 
expulsion  of  a  member  for  refusal  to  take  the  oath ;  but  that  there 
might  be  no  doubt  about  the  sentiments  of  the  members  of  the 
Board  of  Trade,  the  following  resolution,  submitted  by  Stephen 
Clary,  was  adopted : 

"Whereas,  This  meeting  was  called  for  the  purpose  of  adopt- 
ing a  resolution  proposed  in  the  call  for  the  meeting,  and 

"Whereas,  Such  resolution  cannot  be  adopted  without  an 
infringement  of  the  rules  and  regulations,  which  prescribe  a  differ- 
ent mode  of  procedure  ;  therefore, 

"Resolved,  that  this  Board  has  given  indubitable  proof  of  its 
loyalty  in  the  giving  of  its  money  freely  for  the  purpose  of  sustain- 


[1862]  OF  THE  CITY  OF  CHICAGO  293 

ing  the  war,  and  for  the  support  of  the  families  of  the  soldiers  bat- 
tling for  the  Constitution  and  the  Union. 

"Resolved,  That  while  our  rules  and  regulations  prescribe  no 
such  requisite  as  requiring  its  members  to  take  the  oath  of  alle- 
giance, we  do  again  aver  thus  publicly  our  fealty  to  the  Constitu- 
tion and  the  Union. 

"Resolved,  That  the  Board  of  Directors  be  requested  to  refuse 
admission  to  the  membership  of  this  Board  of  any  citizen  of  the 
United  States  against  whom  suspicions  of  disloyalty  to  the  general 
Government  are  known  to  exist,  until  such  suspicions  are  proved  to 
their  satisfaction  to  be  unfounded." 

In  the  latter  part  of  June,  as  the  failure  of  McClellan's  cam- 
paign against  Richmond  became  imminent,  a  sudden  rise  in  the 
premium  for  gold  coin  occurred.  From  three  or  four  per  cent 
premium,  which  had  been  the  average  quotation  most  of  the  time 
since  the  suspension  of  specie  payments  at  the  beginning  of  the 
year,  the  premium  rose  in  a  few  days  to  10  per  cent,  and  on  the  21st 
of  July  to  20  per  cent.  The  probability  that  Congress  would 
authorize  a  new  issue  of  "legal  tender"  notes  to  the  amount  of  one 
hundred  and  fifty  million  dollars,  as  it  did  on  the  11th  of  July,  1862, 
had  a  tendency  to  raise  the  gold  premium,  but  the  controUing  factor 
from  this  time  until  the  close  of  the  war  was  the  military  situation 
in  the  field.  A  military  disaster  to  our  army  was  invariably  fol- 
lowed by  a  rise  in  the  gold  premium,  and  a  victory  by  a  correspond- 
ing decline. 

During  the  late  summer  and  early  autumn  of  1862  the  fortunes 
of  the  Union  were  at  their  lowest  ebb.  So  much  had  been  expected 
of  McClellan,  and  his  campaign  came  so  near  being  a  complete  suc- 
cess, that  the  revulsion  of  feeling  caused  by  his  utter  failure  resulted 
in  great  despondency.  The  enthusiasm  which  filled  the  ranks  dur- 
ing the  first  months  of  the  war  had  given  place  to  a  more  sober 
realization  of  the  fact  that  the  struggle  would  be  long  and  arduous. 

President  Lincoln's  call  for  300,000  more  men  was  issued  July 
6,  1862,  and  the  Board  of  Trade,  which  had  done  its  full  share  of 
patriotic  work  in  conjunction  with  other  organizations  up  to  this 
time,  determined  upon  a  more  independent  course  and  more  vigor- 
ous effort. 

On  the  17th  of  July  the  Board  accepted  the  invitation  of  the 
Union  Defense  Committee,  the  Common  Council,  the  Mercantile 
Association  and  other  organizations  to  co-operate  with  them  in 
a  great  war  meeting  to  be  held  on  the  19th.  This  was  well,  but 
to  the  enthusiastic  patriots  of  the  Board  of  Trade  something  more 
seemed  necessary  and  the  following  request  was  made  : 

"C  T.  Wheeler,  President  of  the  Board  of  Trade  of  the  city  of 
Chicago : 
"We,  the  undersigned  members,  request  you  to  call  at  an  early 
day  a  general  meeting  of  the  members  of  this   Board,  to  pledge 


294  HISTORY  OF  THE  BOARD  OF  TRADE  [1862] 

ourselves  to  use  our  influence  and  money  to  recruit  and  support 
a  battery  to  be  known  as  the  Board  of  Trade  Battery :  M.  C.  Stearns, 
Flint  &  Thompson,  I.  Y.  Munn,  Geo.  Steel,  G.  L.  Scott,  Wm.  Stur- 
gess,  T.  J.  Bronson,  E.  Aiken,  C.  H.  Walker,  Jr.,  E.  G.  Wolcott." 

Pursuant  to  this  request  a  special  meeting  of  the  Board  of 
Trade  was  held  on  the  following  Monday,  July  21,  1862,  at  which 
it  was  resolved  to  recruit  a  company  of  mounted  artillery  to  be 
called  the  Chicago  Board  of  Trade  Battery,  to  serve  three  years 
unless  sooner  discharged.  Ten  thousand  dollars  was  appropriated 
towards  the  expense  of  organizing  this  battery,  and  the  Directors 
were  requested  to  appoint  a  committee  to  carry  out  the  purpose 
of  the  meeting.  A  muster  roll  was  placed  upon  the  table  and  the 
first  signers  were  S.  H.  Stevens,  Geo.  B.  Chandler,  S.  C.  Stevens, 
A.  F.  Baxter,  J.  W.  Bloom,  H.  J.  Baxter,  Calvin  Durand,  Jr.,  J.  A. 
Howard,  Valentine  Steele. 

Another  enthusiastic  meeting  of  the  Board  was  held  the  fol- 
lowing evening  at  which  it  was  announced  that  $11,550  had  been 
raised,  and  that  there  were  sixty-three  names  on  the  muster  roll, 
many  of  whom  were  members  of  the  Board,  or  employees  of  mem- 
bers. On  Wednesday  the  23rd,  at  noon,  it  was  announced  that 
the  subscriptions  to  the  Board  of  Trade  fund  had  reached  $17,000, 
and  that  the  Battery  was  full  and  had  been  tendered  to  the  President 
of  the  United  States. 

The  success  attending  the  organization  of  the  battery  moved 
the  members  of  the  Board  to  further  efifort.  Mr.  C.  H.  Walker 
proposed  the  organization  of  a  regiment  of  infantry,  which  resolu- 
tion was  adopted.  John  V.  Farwell  and  J.  C.  Wright,  both  mem- 
bers of  the  Board  of  Trade,  appeared  as  a  delegation  from  the 
Young  Men's  Christian  Association  with  a  pledge  of  five  com- 
panies for  the  Board  of  Trade  regiment,  and  George  I.  Robinson 
and  Isaiah  Williams  each  tendered  one  company.  Daily  war  meet- 
ings were  held  at  the  rooms  of  the  Board  of  Trade,  and  so  rapidly 
were  the  ranks  of  the  first  Board  of  Trade  regiment  filled  that  on 
the  29th  of  July  it  was  resolved  by  the  War  Committee  of  the 
Board,  after  adding  to  their  number  two  representatives  of  the 
Mercantile  Association  and  one  each  from  the  Young  Men's  Chris- 
tion  Association  and  the  Union  Defense  Committee,  to  raise  "a 
brigade  of  three  regiments  to  be  recruited  under  the  auspices  of 
the  Board  of  Trade  and  the  associations." 

The  Board  of  Trade  Battery  was  mustered  into  the  service 
of  the  United  States  on  the  first  of  August;  the  first  Board  of 
Trade  regiment,  known  of^cially  as  the  Seventy-second  Illinois 
Volunteer  Infantry  on  the  23rd  of  August ;  the  second  Board  of 
Trade  regiment,  known  as  the  Eighty-eighth  Illinois  Volunteer 
Infantry  on  the  4th  of  September,  and  the  third  Board  of  Trade 
regiment,  known  as  the  One  Hundred  and  Thirteenth  Illinois  Vol- 
unteer Infantry  on  the  1st  of  October,  and  all  of  them  served  with 


[1862]  OF  THE  CITY  OF  CHICAGO  29S 

credit  to  themselves  and  with  honor  to  the  great  organization  under 
whose  auspices  th^y  went  forth  to  battle.  They  never  served  in 
the  same  brigade,  however. 

But  the  Board  of  Trade  did  more  than  supply  money  for  the 
equipment  of  these  soldiers.  Among  the  members  of  the  Board  in 
the  first  Board  of  Trade  regiment  (Seventy-second)  were  Joseph 
C.  Wright,  who  was  chosen  lieutenant  colonel,  and  who  gave  his 
life  to  his  country  in  the  assault  upon  the  enemy  defenses  at  Vicks- 
burg  on  the  22d  of  May,  1863 ;  Joseph  Stockton,  captain  of  Com- 
pany "A,"  and  afterwards  lieutenant  colonel  of  the  regiment,  and 
Lieutenant  Benjamin  W.  Underwood,  who  later  was  adjutant  of 
the  regiment. 

The  Chicago  "Tribune"  of  August  4,  1862,  in  a  very  compli- 
mentary editorial  on  the  Board  of  Trade,  says,  that  "the  subscrip- 
tion list  is  swollen  to  nearly  fifty  thousand  dollars." 

"All  in  all,  the  Board  of  Trade  during  the  war  collected  the 
munificent  sum  of  $220,000,  and  disbursed  it  in  equipping  and  mani- 
taining,  not  only  its  own  regiments,  but  the  various  other  Chicago 
troops  as  well."  ("The  Board  of  Trade  in  the  Civil  War,"  Chester 
Arthur  Legg,  p.  15.) 

On  the  2nd  of  August,  1862,  a  little  350-ton  brig,  the  "Sleipner," 
arrived  from  Bergen,  Norway,  with  one  hundred  and  fifty  Swedish 
passengers,  and  one  American  of  Swedish  parentage,  who  was  born 
on  Lake  Erie.  This  was  the  first  European  vessel  which  arrived 
at  the  Port  of  Chicago  with  passengers  and  cargo  direct,  and  her 
commander,  Captain  Waage,  was  tendered  the  hospitalities  of  the 
Board  of  Trade  on  the  evening  of  August  5. 

From  the  first  outbreak  of  hostilities  there  had  been  in  every 
large  community  in  the  Northern  States  a  considerable  minority 
of  men  and  women  who,  on  account  of  social,  business  or  family 
ties,  or  by  reason  of  former  political  affiliation,  were  opposed  to  the 
prosecution  of  the  war.  The  great  uprising  of  patriots  when  Fort 
Sumter  was  attacked  had  cowed  these  disloyal  people,  but  as  the 
months  went  on,  with  their  awful  sacrifices  of  life  and  treasure, 
and  with  little  apparent  progress  toward  the  suppression  of  the 
rebellion,  they  could  not  conceal  their  satisfaction.  There  were  a 
number  of  them  in  the  Board  of  Trade,  and  how  many  there  were 
in  the  city  and  vicinity  may  be  inferred  from  the  fact  that  the 
Chicago  "Times,"  edited  by  Wilbur  F.  Storey,  a  bitter  anti-war 
partisan,  could  in  the  most  critical  period  of  the  great  struggle, 
find  support.  Men  whose  sons  and  brothers  were  daily  putting  their 
lives  in  jeopardy  for  a  cause  which  the  "Times"  was  using  every 
effort  to  hinder  and  make  more  difficult,  could  not  look  without 
indignation  upon  the  encouragement  which  Mr.  Storey  was  giving 
to  the  discontented  at  home  and  the  enemies  of  the  country  in  the 
field.  On  the  last  day  of  the  year  1862,  Mr.  N.  I-C.  Fairbank  offered 
the  following  resolutions,  which  were  adopted : 


296  HISTORY  OF  THE  BOARD  OF  TRADE  [1862] 

"Whereas,  The  articles  appearing  almost  daily  in  the  Chicago 
'Times'  newspaper  are  calculated  to  give  aid  and  comfort  to  traitors 
engaged  in  a  most  unholy  war  upon  the  Government ;  and, 

"Whereas,  In  publishing  such  matter  as  charging  upon  the 
administration,  in  its  efforts  to  put  c^own  the  rebellion,  the  'murder 
of  the  fathers,  sons  and  brothers  of  the  North,'  as  well  as  almost 
every  other  crime  in  the  category,  said  paper  is  doing  what  lies 
in  its  power  to  create  discord  and  dissension  at  the  North,  leading 
to  the  loss  of  the  Constitution  and  the  ruin  of  the  Union,  and 

"Whereas,  The  said  paper  is  in  the  practice  of  making  the 
most  outrageous  and  uncalled-for  attacks  upon  the  private  character 
and  standing  of  our  most  respectable  citizens,  thereby  causing  it  to 
be  deserving  of  unmeasured  reprobation ; 

"Therefore,  Resolved,  By  this  Board  of  Trade,  while  disclaim- 
ing all  partisan  feeling,  and  being  actuated  by  no  other  motive  than 
the  public  welfare  and  the  fair  fame  of  our  city,  that  the  Chicago 
'Times'  is  unworthy  of  countenance  or  support,  and  that  the 
Directors  are  hereby  requested  to  exclude  it  from  the  reading-room 
of  the  Board. 

"Resolved,  That  this  Board  knows  of  no  objection  to  the  com- 
mercial editor  of  the  Chicago  'Times,'  personally,  but  inasmuch  as 
his  presence  on  'Change,  to  a  certain  extent,  tolerates  the  paper,  he 
is  hereby  excluded  from  the  rooms,  as  a  reporter  for  said  paper." 

The  "Times"  in  its  next  issue  charged  that  the  resolutions 
were  sprung  upon  a  few  members  of  the  Board  when  the  majority 
had  left  the  rooms,  and  that  they  did  not  represent  the  sentiment 
of  the  Board  as  a  whole.  But  on  the  2d  of  January,  1863, 
the  Board  of  Trade  confirmed  the  action  taken  two  days  before 
by  a  majority  so  imposing  that  the  "Times"  was  obliged  to  accept 
it  as  final,  and  to  fall  back  upon  a  threat  that  a  new  Corn  Exchange 
would  be  organized,  which  "will  be,  unlike  the  old  one,  an  honor 
and  credit  to  the  city."     ("Times,"  Jan.  3,  1863.) 

In  1862  two  new  grain  elevators  were  built,  with  a  combined 
capacity  of  900,000  bushels,  so  that  at  the  close  of  the  year  the 
elevators  of  the  city  had  a  capacity  of  6,815,000  bushels. 

Notwithstanding  the  war,  and  to  some  extent  in  consequence  of 
it,  the  population  and  commerce  of  Chicago  continued  to  grow. 
The  Secretary  of  the  Board  of  Trade,  in  reviewing  the  year  1862, 
says:  "An  immense  amount  of  wealth  has  been  added  to  her 
resources,  both  by  legitimate  profits  on  the  year's  transactions,  and 
the  influx  of  capitalists  from  almost  every  part  of  the  Northern  and 
Western  States." 

There  was  a  partial  failure  of  the  spring  wheat  crop  in  the 
country  immediately  tributary  to  Chicago  in  1862,  and  although 
the  shipments  from  Minnesota,  Northern  Iowa  and  Northern  Wis- 
consin showed  a  gratifying  increase,  the  total  for  the  year  was 
nearly  three  and  one-half  million  bushels  less  than  in  1861.  As 
partial  compensation  for  this  loss  in  the  wheat  trade  there  was  an 
increase  of  187,107  in  the  number  of  barrels  of  flour  received,  the 


[1862]  OF  THE  CITY  OF  CHICAGO  297 

equivalent  of  nearly  850,000  bushels  of  wheat.  Some  of  this  flour 
came  from  Missouri  and  Southern  Illinois,  from  which  region  flour 
had  formerly  gone  to  New  York,  Boston  and  Philadelphia. 

Comparative  receipts  and  shipments  of  flour  and  wheat  for 
1862  were  as  follows:  Receipts — Flour,  barrels,  1,666,391;  wheat, 
bushels,  13,978,116.  Shipments— Flour,  barrels,  1,739,849;  wheat, 
bushels,  13,808,898.  The  price  of  wheat  fluctuated  less  in  1862  than 
in  the  previous  year.  The  lowest  quotation  for  No.  2  spring  wheat 
was  65  cents  in  January  and  the  highest  92^  cents  in  August. 

Corn 

The  corn  crop  of  1862  in  lUinois  and  Iowa  was  lighter  in  yield 
than  either  of  the  two  preceding  crops,  but  so  much  was  carried 
over  by  the  farmers  from  those  years  of  plenty  that  the  extent  of 
the  corn  trade  of  Chicago  was  limited  only  by  transportation  and 
storage  facilities,  and  the  receipts  exceeded  those  of  the  previous 
year  by  3,204,339  bushels.  Secretary  Catlin's  figures  are  as  follows : 
Receipts,  29,574,328  bushels;  shipments,  29,452,610  bushels.  The 
price  of  mixed  corn  was  from  22  to  29  cents  a  bushel  during  the 
first  half  of  the  year.  It  rose  to  36%  in  August,  to  39  in  October 
and  to  41  at  the  close  of  the  year. 

Oats 

The  trade  in  oats  was  more  than  doubled  by  the  demand  for 
army  use,  and  the  receipts  and  shipments  were  4,688,722  and  3,112,- 
366  respectively.  Prices,  too,  of  No.  1  oats  advanced  from  16  cents 
a  bushel  in  January  to  43)4  cents  in  the  latter  part  of  December. 

Rye  and  Barley 

Receipts  of  rye  more  than  doubled,  and  receipts  of  barley 
nearly  doubled.  The  following  are  the  figures  in  bushels  :  Receipts 
—Rye,  1,038,825 ;  barley,  872,053.  Shipments— Rye,  871,796 ;  barley, 
532,195.  The  price  of  No.  1  rye  advanced  from  32  cents  a  bushel 
in  January  to  65  cents  in  December.  The  price  of  No.  1  barley  like- 
wise advanced  from  34  cents  a  bushel  in  January  to  $1.25  a  Ijushel 
in  October. 

The  Provision  Trade 

Fifty-seven  firms  and  individuals  were  engaged  in  the  pork 
packing  business  in  Chicago  in  1862,  of  whom  Cragin  &  Co.,  an 
eastern  firm,  whose  local  representative  was  John  L.  Hancock, 
packed  81,349;  Kreigh  &  Harbach,  64,250;  A.  E.  Kent  &  Co.,  56,434; 
R.  M.  &  O.  S.  Hough,  54,922.  No  other  packers  are  credited  with 
as  many  as  50,000.  No  branch  of  Board  of  Trade  activity  showed 
so  great  an  increase  in  1862  as  the  packing  business.  Receipts  of 
live  hogs  more  than  doubled,  dressed  hogs  nearly  doubled,  packing 
increased  123  per  cent,  and  shipments  about  86  per  cent.  Among 
the  new  packing  houses  built  during  the  year  were   seven   large 


298  HISTORY  OF  THE  BOARD  OF  TRADE  [1862] 

houses  on  the  Chicago  River,  all  of  which  were  constructed  on 
the  most  approved  plans.  An  extensive  trade  in  English  middles 
had  developed  during  the  years  1861  and  1862,  and  a  large  propor- 
tion of  the  hogs  packed  in  Chicago  in  those  years  were  cut  for  the 
London  and  Liverpool  markets.  The  following  are  the  receipts 
and  shipments  of  hogs  for  the  year:  Receipts,  1,348,890;  shipments, 
491,135. 

The  number  of  hogs  packed  in  Chicago  during  the  year  1862 
was  842,515. 

Receipts  of  cattle  showed  a  small  increase  over  the  previous 
year,  and  the  receipts  were  209,655  and  shipments  were  112,745. 
The  lowest  prices  for  live  hogs  were  $1.75@2  per  hundred  pounds 
in  June  and  $2  in  August,  and  the  highest  $4  in  November.  Choice 
cattle  sold  as  low  as  $2.87^  per  hundred  pounds  in  April  and  as 
high  as  $4  in  May.  Mess  pork  sold  as  low  as  $8  a  barrel  in  January, 
and  as  high  as  $12.25  in  December.  Mess  beef  sold  as  low  as  $8.50 
a  barrel  in  January,  and  as  high  as  $12  in  July  and  August. 

Lumber 

The  receipts  of  lumber  showed  a  large  increase,  while  ship- 
ments were  nearly  stationary,  including  a  large  increase  in  the  city 
consumption.  Secretary  Catlin's  figures  are :  Receipts,  305,674,045 
square  feet ;  shipments,  189,277,079  square  feet ;  city  consumption, 
122,040,135  square  feet. 

Lake  Transportation  to  Buffalo 

The  season  opened  with  shippers  paying  15  cents  a  bushel  on 
wheat  and  13  cents  a  bushel  on  corn  from  Chicago  to  Buffalo ;  but  in 
the  latter  part  of  May  the  rates  were  5^/2  and  Ay^  cents  respectively, 
advancing  again  to  16  cents  for  wheat  and  15  cents  for  corn  in 
November,  the  highest  of  the  year. 

Railroad  Rates 

Rail  freights  to  New  York  on  wheat,  corn  and  products  of  pork 
and  beef  were  $1  per  hundred  pounds  at  the  beginning  of  the  year. 
They  were  reduced  to  55  cents  per  hundred  pounds  in  June  and  July, 
and  advanced  again  to  $1.05  in  December. 

Tonnage 

The  tonnage  of  vessels  engaged  in  the  commerce  of  the  Lakes 
in  1862  was:  American  bottoms,  361,997  tons;  Canadian  bottoms, 
88,896  tons.  Of  the  American  tonnage  less  than  one-third  was 
propelled  by  steam. 

At  the  close  of  the  year  1862  the  Board  of  Trade  had  980  mem- 
bers, representing  nearly  every  important  line  of  business  in  the 
city.  Those  occupations  in  which  ten  or  more  were  engaged  are 
as  follows: 


[1863]  OF  THE  CITY  OF  CHICAGO  299 

Commission  ;  merchants,  447;  produce  and  commission,  62; 
packers,  45;  bankers,  27;  wholesale  grocers,  27;  insurance  agents, 
23 ;  general  commission,  21 ;  grain  dealers,  21 ;  millers,  21 ;  lumber 
dealers,  20;  grain  elevators,  15;  vessel  agents,  15;  produce  brokers, 
12;  distillers,  10;  wholesale  dry  goods,  10. 

Any  comprehensive  view  of  the  fluctuation  in  prices  of  agri- 
cultural products  from  the  beginning  of  the  great  rise  in  the  pre- 
mium for  gold  coin  during  the  latter  part  of  June,  1862,  until  its 
disappearance  in  1879,  when  the  United  States  Treasury  resumed 
specie  payments,  must  take  into  consideration  the  changes  in  that 
premium  which  were  instantly  reflected  in  the  price  of  all  exporta- 
ble commodities.  The  price  of  gold  coin  in  New  York  at  the  close 
of  the  year  was  $1.33@1.33j^.  Assuming  the  price  to  have  been 
$1.33j^,  the  specie  value  of  wheat,  corn,  pork  and  other  produce 
was  precisely  25  per  cent  less  than  the  following  quotations,  which 
were  in  legal  tender  money :  No.  2  spring  wheat,  86  cents ;  equal  to 
64j4  cents  in  gold.  Mixed  corn,  40^  ;  equal  to  30>4@5^  in  gold. 
No.  1  oats,  41 ;  equal  to  30^  in  gold.  Mess  pork,  $13  ;  equal  to  $9.75 
in  gold. 

The  war  made  little  progress  in  1862 ;  but  on  the  whole  the 
result  was  slightly  favorable  to  the  Union  Armies.  The  failure 
of  General  IMcClellan's  Peninsula  campaign,  and  General  Pope's 
fiasco  at  Bull  Run  (second  Bull  Run),  and  the  consequent  invasion 
of  Maryland  by  the  Confederates,  were  fully  offset,  so  far  as  mili- 
itary  results  were  concerned,  by  McClellan's  defeat  of  Lee  at 
Antietam  and  the  retreat  of  the  latter  to  his  fortified  lines  at 
Fredericksburg.  Burnside's  rash  frontal  assault  upon  a  position 
well-nigh  impregnable  left  the  situation  in  the  eastern  theater  of 
war  discouraging.  Elsewhere,  however,  the  balance  was  greatly 
in  our  favor.  New  Orleans  was  firmly  held  by  Union  Forces ;  the 
enemy  had  been  so  severely  handled  at  Pea  Ridge  and  Prairie 
Grove  that  the  Confederates  had  been  driven  from  Missouri ;  nearly 
all  of  Kentucky  was  in  our  hands,  as  well  as  a  considerable  portion 
of  Tennessee,  some  of  Arkansas  and  Mississippi  and  most  of  West 
Virginia;  and  important  positions  were  held  on  the  sea  coast. 

1863 

At  the  close  of  the  last  day  of  the  year  1862,  the  armies  of 
General  Rosecrans  and  General  Bragg  confronted  each  other  on 
the  bloody  field  of  Stone  River,  where  the  grim  tenacity  with  which 
General  Sheridan's  division  held  its  ground,  saved  the  Union  forces 
from  disaster.  The  second  Board  of  Trade  regiment  was  in  Sheri- 
dan's division,  and  participated  in  its  glorious  service ;  while  the 
Chicago  Board  of  Trade  battery  in  the  Pioneer  Brigade  of  the  Army 
of  the  Cumberland  won  equal  renown.  Immediately  after  this 
great  battle,  the  Board  of  Trade  sent  agents  and  nurses  (Mrs.  O.  E. 
Hosmer  and  Mrs.  Smith  Tinkham  among  them),  to  the  hospitals 


300  HISTORY  OF  THE  BOARD  OF  TRADE  [1863] 

at  Nashville  and  Murfreesboro,  to  which  the  wounded  had  been 
brought  in  great  numbers  from  the  battlefield.  Supplies,  including- 
rubber  blankets,  were  also  sent  to  the  battery  and  to  the  second 
Board  of  Trade  regiment,  both  of  which  had  suffered  severely  in 
this  action.  The  latter  met  its  first  loss  at  the  battle  of  Perryville, 
October  8,  1862,  where  it  received  its  baptism  of  fire  less  than  five 
weeks  after  leaving  Chicago. 

So  conspicuous  was  the  valor  and  good  conduct  of  the  Board 
of  Trade  battery  in  the  Battle  of  Stone  River  that  General  Rose- 
crans,  upon  request  of  Captain  Stokes,  suspended,  in  its  application 
to  this  battery,  a  General  Order  which  had  been  promulgated  by 
General  Buell  some  months  before,  forbidding  batteries  in  the  serv- 
ice of  the  United  States  to  use  flags.  This  action  by  General  Rose- 
crans  permitted  the  battery  to  display  a  beautiful  stand  of  colors 
which  the  Board  of  Trade  presented  to  the  organization  bearing 
its  name,  about  two  months  before.     ("Tribune,"  January  24,  1863.) 

Mr.  Seth  Catlin,  who  had  been  Secretary  of  the  Board  of  Trade 
for  several  years,  died  on  the  18th  of  January,  1863,  after  a  long 
illness,  and  on  the  26th  of  February  John  F.  Beaty  was  elected  in 
his  stead. 

On  the  21st  of  February,  1863,  a  meeting  of  the  Board  of 
Trade  was  held  at  which  John  L.  Hancock,  chairman  of  the  War 
Fund  Committee,  reported  in  substance  as  follows : 

Total  receipts  to  February  14,  1863 $50,375.38 

Paid  to  190  families  of  soldiers  of  the  Board  of  Trade  bat- 
tery and  regiments 5,292.00 

Paid  bounty  to  members  of  the  battery 9,360.00 

Paid  to  families  on  allotment 797.00 

Paid  for  goods,  exclusive  of  money  raised  by  contributions 

on  'Change 4,520.46 

Paid  for  recruiting 2,415.62 

Total  expended  to  October  15,  1862 $22,601.48 

Disbursements  by  War  Fund  Committee  from  October  15, 

1862,  to  February  14,  1863 7,208.93 

Total  disbursements   $29,810.41 

Balance  on  hand 20,564.97 

An  item  of  $216.40  is  required  to  make  these  figures  from  the 
"Tribune"  of  February  23rd  balance. 

At  this  meeting  the  committee,  who  had  been  sent  South  to 
look  after  the  welfare  of  the  Board  of  Trade  regiments  and  bat- 
teries, reported  that  "Mrs.  Hosmer  and  Mrs.  Tinkham  are  still  min- 
istering to  the  wants  of  our  men  in  the  hospitals  at  Nashville  and 
Murfreesboro."  On  the  3rd  of  March,  1863,  there  was  a  special 
meeting  of  the  Board  of  Trade,  at  which  Mr.  Ira  Y.  Munn  made 


[1863]  OF  THE  CITY  OF  CHICAGO  301 

an  urgent  request  for  aid  for  our  soldiers,  and  moved  that  imme- 
diate action  be  taken  towards  this  end.  The  motion  prevailed  and 
Murry  Nelson,  chairman,  W.  V.  Cox,  P.  L.  Underwood  and  E.  G. 
Wolcott  were  appointed  the  committee.  An  earnest  appeal  was 
made  by  means  of  circulars,  which  were  distributed  throughout 
the  State,  as  well  as  in  Chicago.  Fruit  and  vegetables  were  much 
needed  by  the  soldiers,  and  donations  of  these  indispensable  arti- 
cles of  diet  were  solicited,  as  well  as  gifts  of  money.  As  a  result 
of  the  committee's  energetic  campaign,  Mr.  Nelson  was  able  to 
report  to  the  Board  on  the  27th  of  the  month  that  $3,080  in  money 
had  been  collected  and  a  quantity  of  vegetables,  clothing  and  sani- 
tary stores  almost  equal  in  value  to  the  money.  These  contribu- 
tions to  the  comfort  and  health  of  the  soldiers  were  forwarded  to 
the  camps  as  soon  as  received. 

The  Financial   Situation 

Closely  related  to  the  military  situation  during  the  war,  and 
of  equal  importance,  was  the  financial  problem ;  and  of  vast  influ- 
ence upon  both  these  vital  questions  was  the  public  opinion  of  the 
loyal  States.  These  States  had  a  superiority  in  numbers  and  in 
wealth  which  would  have  enabled  them  to  crush  the  rebellion  in 
much  less  time  than  was  really  consumed,  if  their  people  had  been 
united  in  favor  of  a  vigorous  prosecution  of  the  war.  Almost  as 
speedy  would  have  been  the  result  if  it  had  been  practicable  for 
them  to  expel  from  their  midst  the  hundreds  of  thousands  of  men 
who  by  their  opposition  to  the  war  rendered  far  greater  assistance 
to  the  Southern  Confederacy  than  they  could  have  done  if  they 
had  been  in  the  field  under  Lee  or  Hood  or  Johnson.  The  contest 
would  have  been  shorter  if,  as  someone  expressed  it,  "we  could 
have  had  all  our  enemies  in  front."  President  Lincoln's  proclama- 
tion of  January  1,  18.63,  emancipating  the  slaves  in  all  the  States, 
or  parts  of  States,  still  in  rebellion,  offered  an  excuse  for  the  most 
violent  opposition  to  the  administration  on  the  part  of  secession 
sympathizers,  and  even  estranged  many  who  had  before  been  Mr. 
Lincoln's  supporters.  Almost  from  the  beginning  of  hostilities, 
the  President  had  been  urged  by  a  small  but  persistent  and  aggres- 
sive group  of  radical  men  to  take  this  action,  which  he  had  felt 
was  premature.  General  Fremont  and  General  Hunter  had  assumed 
authority  to  free  slaves  in  their  respective  departments,  and  had 
been  sharply  rebuked  by  the  President  for  usurping  a  power  which 
belonged  to  the  executive  alone.  But  in  the  autumn  of  1862,  Mr. 
Lincoln  felt  that  as  a  war  measure  the  proclamation  should  not  be 
longer  delayed,  and  on  the  22d  of  September,  five  days  after  the 
battle  of  Antietam,  he  announced  to  the  people  of  the  States  in 
rebellion  that  unless  they  should  submit  to  the  authority  of  the 
United  States,  he  would,  on  the  1st  of  January,  1863,  declare  the 
freedom  of  their  slaves,  and  support  this  declaration  by  the  military 


302  HISTORY  OF  THE  BOARD  OF  TRADE  [18631 

power  of  the  United  States.  Although  issued  as  a  war  measure, 
Mr.  Lincoln's  detractors  misrepresented  it  as  an  unconstitutional 
interference  with  the  rights  of  slaveholders  in  the  rebellious  States,, 
which  apparently  gave  them  more  concern  in  this  great  crisis  than, 
the  existence  of  the  Nation. 

The  new  line  of  cleavage  in  the  public  opinion  of  the  people 
produced  by  the  Emancipation  Proclamation  probably  influenced 
to  some  extent  the  credit  of  the  Government,  and  was  responsible 
in  part  for  the  advance  in  the  gold  premium  which  set  in  early  in 
January  and  reached  55  per  cent  on  the  27th  of  that  month,  and 
72]/^  on  the  2Sth  of  February.  It  was  apparent  that  a  crisis  was 
at  hand  in  the  affairs  of  the  United  States  Treasury,  and  the  news- 
papers of  the  country  were  full  of  editorial  advice  to  Congress. 
"Wells'  Weekly  Commercial  Express,  in  its  issue  of  January  IS, 
1863,  says:  "The  excitement  in  financial  circles  in  regard  to  the 
probable  increased  issue  of  'greenbacks,'  leading  to  a  further  and 
altogether  unprecedented  rise  in  the  gold  premium,  has  been  the 
all-prevailing  influence  in  the  markets  for  leading  articles  of  coun- 
try produce." 

On  the  17th  of  January,  1863,  a  third  issue  of  $100,000,0(X> 
legal  tender  notes  was  authorized,  increased  March  3d  to  $150,- 
000,000,  making  a  total  of  $450,000,000  authorized  legal  tender 
notes.  On  the  25th  of  February,  President  Lincoln  approved  the 
Act  of  Congress  passed  some  days  before,  known  as  the  National 
Banking  Act.  Whether  the  alarm  in  financial  circles  which  culmi- 
nated at  this  time  in  the  highest  gold  premium  of  the  year,  as 
already  related,  was  real  or  simulated,  it  soon  began  to  subside, 
and  the  success  of  the  National  banking  system  was  a  great  boon 
to  the  Government  during  the  remainder  of  the  war  and  for  half  a 
century  afterwards. 

On  the  26th  of  March,  a  member  of  the  Board  of  Trade  was 
expelled  by  a  special  meeting  of  the  Association.  The  offender 
was  charged  "with  an  attempt  to  commit  a  fraud,"  in  applying  for 
a  policy  of  insurance  on  a  cargo  of  grain  several  hours  after  he 
knew  that  the  vessel  and  cargo  were  lost  in  the  lake.  He  admitted 
the  facts  as  charged,  but  insisted  that  he  had  intended  only  to 
perpetrate  an  innocent  joke.  Unable  to  appreciate  so  keen  a  sense 
of  humor,  the  Board  decided  that  the  culprit  should  have  no  further 
opportunity  to  perpetrate  jokes  of  this  kind  on  the  Board  of  Trade. 
Another  member  was  charged  with  an  act  of  fraud  at  this  meeting, 
but  there  was  a  conflict  in  the  testimony  and  he  escaped  punish- 
ment by  the  close  vote  of  53  to  47.  At  this  meeting,  Charles  Ran- 
dolph offered  the  following  amendment  to  the  by-laws  of  the 
Board,  giving  the  directors  a  powar  of  discipline  which  had  been 
heretofore  lodged  in  the  full  Board :  "Any  member  of  the  Associa- 
tion, making  contracts,  either  written  or  verbal,  and  failing  to 
comply  with  the  terms  of  such  contract,  shall  upon  representation 


[1863]  OF  THE  CITY  OF  CHICAGO  303 

of  an  aggrieved  member  to  the  Board  of  Directors,  accompanied 
with  satisfactory  evidence  of  the  facts,  be  suspended  by  them  from 
all  privileges  of  membership  in  the  Association  until  such  contract 
is  equitably  or  satisfactorily  arranged  and  settled.  And  it  shall  be 
the  duty  of  the  Board  of  Directors  to  cause  to  be  publicly  announced 
to  the  Association  the  suspension  or  restoration  of  any  member 
suspended  under  this  rule."  Consideration  of  this  proposed  amend- 
ment was  deferred  until  the  annual  meeting,  when  it  was  adopted. 

The  Fifteenth  Amiual  Meeting 

The  fifteenth  annual  meeting  of  the  Board  of  Trade  was  held 
April  6,  1863.  The  officers  elected  were:  John  L.  Hancock,  Presi- 
dent; N.  K.  Fairbank,  First  Vice-President,'  Charles  Randolph, 
Second  Vice-President. 

The  retiring  President,  C.  T.  Wheeler,  reported  that  the  total 
amount  paid  into  the  treasury,  exclusive  of  the  war  fund,  was 
was  $33,836.37;  total  expenditures,  $31,832.03;  amount  collected  for 
the  war  fund,  $51,365.99;  paid  out  on  orders  of  the  War  Fund 
Committee,  $36,566.12 ;  leaving  in  the  hands  of  the  Board  of  Trade, 
subject  to  the  order  of  the  War  Fund  Committee,  $14,799.87. 

Attention  was  called  to  the  urgent  need  of  more  commodious 
quarters,  and  the  President  recommended  that  immediate  steps 
be  taken  to  procure  a  suitable  location,  and  to  erect  thereon  a  Board 
of  Trade  building.  On  the  21st  of  May,  1863,  a  committee  consist- 
ing of  N.  K.  Fairbank,  Charles  Randolph,  J.  C.  Dore,  Julian  S. 
Rumsey,  Stephen  Clary,  W.  D.  Houghteling  and  C.  T.  Wheeler, 
recommended  the  organization  of  the  Board  of  Trade  Building 
Association,  and  submitted  a  proposed  amendment  to  the  charter 
of  the  Board  under  which  it  was  believed  that  the  Board  could 
construct  and  own  its  building.  Further  investigation  convinced 
the  committee  that  their  first  plan  was  inexpedient. 

A  new  committee,  of  which  Charles  Randolph  was  chairman, 
on  the  19th  of  February,  1864,  recommended  the  organization  of  a 
joint  stock  company  under  the  charter  of  the  Chamber  of  Com- 
merce of  Chicago,  for  the  purpose  of  erecting  and  owning  the 
building,  and  the  Board  of  Trade  adopted  the  report  of  the  com- 
mittee. This  was  the  charter  obtained  on  the  14th  of  April,  1863, 
by  those  members  of  the  Board  of  Trade  who  felt  aggrieved  at  the 
action  of  the  Association  with  relation  to  the  Chicago  "Times." 
Their  resentment  appears  to  have  been  appeased  when  the  charter 
was  obtained,  and  they  took  no  further  steps  looking  to  the  crea- 
tion of  a  rival  exchange.  Mutual  forbearance  prevailed,  and  the 
project  slumbered  until  the  winter  of  1863-4,  when,  to  avoid  for- 
feiture of  the  charter,  it  became  necessary  to  perfect  the  organiza- 
tion, and  20  shares  of  stock  of  a  par  value  of  $100  each  were  taken 
and  officers  elected.  Several  of  these  were  staunch  supporters  of 
the  old  Board,  and  doubtless  the  wisdom  of  making  the  Chamber 


304  HISTORY  OF  THE  BOARD  OF  TRADE  [1863] 

of  Commerce  a  building  corporation  rather  than  a  rival  commercial 
organization  was  apparent  to  all.  One  provision  of  the  charter  of 
the  Chamber  of  Commerce  not  found  in  that  of  the  Board  of  Trade 
reads  as  follows: 

"Provided,  no  person  shall  ever  be  rejected  or  expelled  for 
religious  or  political  tenets,  and  no  member  shall  be  expelled  or 
any  penalty  inflicted  upon  said  member  for  any  offense  against  said 
corporation,  except  upon  conviction,  after  due  notice,  and  a  fair 
trial  and  hearing  in  the  presence  of  the  accused  (unless  said  mem- 
ber has  absconded),  who  shall  be  permitted  to  examine  and  cross- 
examine  witnesses  upon  said  trial.  The  testimony  taken  at  said 
trial,  if  requested  by  either  party,  shall  be  taken  in  writing  and 
shall  be  accessible  to  either,  for  reading,  copying  or  publishing  the 
same." 

The  widely  heralded  Canal  Convention  met  in  Chicago  on  the 
2d  of  June,  1863,  and  elected  Hon.  Hannibal  Hamlin,  Vice-President 
of  the  United  States,  its  permanent  chairman.  The  delegates  from 
the  Board  of  Trade  were :  John  L.  Hancock,  N.  K.  Fairbank, 
Stephen  Clary,  George  Armour,  C.  H.  Walker,  (Ira  Y.  Munn,  Wil- 
liam Sturges,  R.  McChesney,  N.  K.  Whitney,  W.  D.  Houghteiing, 
C.  T.  Wheeler,  J.  S.  Rumsey,  G.  S.  Hubbard,  Charles  Randolph, 
E.  W.  Densmore.  A  large  number  of  distinguished  men  were 
present  as  delegates,  nearly  every  loyal  State  east  of  the  Rocky 
Mountains  being  represented.  The  convention  was  in  session  three 
days,  and  discussion  disclosed  a  wide  divergence  of  sentiment 
among  those  present.  The  call  of  the  convention  indicated  "the 
enlargement  of  the  canals  between  the  Valley  of  the  Mississippi 
and  the  Atlantic,"  as  the  object  in  view,  but  delegates  seemed  deter- 
mined to  talk  on  other  subjects,  and  advocates  of  a  ship  canal 
around  the  Falls  of  Niagara;  advocates  of  canal  around  the  Des 
Moines  Rapids  and  the  Rock  Island  Rapids  of  the  Mississippi 
River ;  advocates  of  an  improvement  of  the  St.  Clair  flats,  and 
of  the  enlargement  and  deepening  of  the  channel  of  the  Fox 
and  Wisconsin  Rivers,  and  other  projects,  insisted  upon  a 
hearing. 

An  executive  committee  was  appointed,  but  the  unanimity  of 
sentiment  which  was  hoped  for  could  not  be  secured,  and  with- 
out the  prospect  of  inducing  the  Congress  of  the  United  States 
to  enlarge  the  Illinois  and  Michigan  Canal  at  national  expense 
was  not  flattering. 

On  the  1st  of  June,  1863,  Allen  C.  Fuller,  adjutant  general 
of  the  State  of  Illinois,  appealed  to  the  Board  of  Trade  for  aid  for 
the  Sanitary  Commission,  and  the  members  subscribed  $5,560  as 
individuals,  to  which  the  association  added  $2,500. 

During  the  first  few  days  of  July  Lee  was  defeated  at  Gettys- 
burg, and  General  Pemberton  surrendered  the  city  of  Vicksburg  to 
General  Grant  with  31,600  prisoners  of  war.  After  these  defeats  the 
Confederacy's  only  chance  of  ultimate  success  lay  in  the  possibility 


[1863]  OF  THE  CITY  OF  CHICAGO  30S 

that  disaffection  in  the  North  might  result  in  a  political  revolu- 
tion, and  the  triumph  of  the  "peace  Democracy"  at  the  polls. 

The  Chicago  "Tribune"  of  July  7  contains  an  eloquent  tribute 
to  the  memory  of  Lieutenant-Colonel  Joseph  C.  Wright  of  the 
Seventy-second  Illinois  Volunteer  Infantry  (first  Board  of  Trade), 
who  died  in  Chicago  on  the  previous  day  in  consequence  of  wounds 
received  in  the  assault  upon  the  enemy's  works  at  Vicksburg, 
May  22.  His  arm  was  amputated  on  the  field  of  battle,  and  he 
recovered  sufficiently  to  endure  the  journey  to  his  home.  Hope 
of  his  restoration  to  health  had  been  entertained,  but  a  second 
amputation  was  found  necessary,  and  he  died  as  every  soldier  would 
choose  to  die,  of  wounds  received  in  the  line  of  duty.  President 
Hancock  called  the  Board  to  order  at  12  :30  o'clock  when  Colonel 
Wright's  death  was  announced,  and  a  committee  was  appointed  to 
arrange  for  a  military  funeral.  This  was  held  on  the  following  day 
at  the  Second  Presbyterian  Church,  of  which  Colonel  Wright  was 
a  consistent  and  conspicuous  member.  While  the  funeral  was  in 
progress  in  the  church  the  people  of  Chicago  outside  the  church 
were  wild  with  joy  because  of  the  surrender  of  Vicksburg,  news 
of  which  had  been  received  on  'Change  just  before  noon  of  that  day. 

On  the  16th  of  July  the  Norwegian  sloop  "Skjoldmoen,"  55 
tons,  arrived  from  Bergen,  Norway,  after  a  voyage  of  94  days.  The 
"Tribune"  of  the  18th  claims  that  "this  sloop  is  the  smallest  vessel 
that  ever  crossed  the  Atlantic." 

The  Common  Council  having  attempted  to  interfere  with  the 
Board  of  Trade  inspectors,  the  Board  on  the  17th  of  September, 
1863,  endorsed  "the  action  of  the  Directors,  who  resolved  that  they 
will  defend  any  and  all  suits  instituted  by  the  city  of  Chicago,  or 
under  its  direction  or  authority,  against  any  member  or  members 
of  the  Board  of  Trade  for  alleged  violations  of  municipal  ordinances 
appertaining  to  the  subject  of  inspection." 

Brigadier-General  T.  E.  G.  Ranson,  commander  of  the  brigade 
in  which  the  first  Board  of  Trade  regiment  (Seventy-second  Illinois) 
was  included,  visited  the  Board  on  the  9th  of  October,  and  in  the 
course  of  his  remarks  expressed  his  opinion  of  that  organization, 
as  follows :  "They  need  no  words  of  praise  from  me,  for  their 
brilliant  record  before  Vicksburg,  and  their  torn  and  tattered  colors, 
speak  in  louder  terms  than  I  can  express,  of  the  honor  they  have 
conferred   upon   you  and   themselves. 

On  the  14th  of  November  a  special  meeting  of  the  Board 
pledged  itself  to  secure  the  erection  of  a  Soldiers'  Monument  in 
Rosehill  Cemetery.  It  also  voted  to  aid  in  recruiting  to  their  full 
strength  the  Board  of  Trade  regiments,  which  had  become  greatly 
reduced  in  numbers.  A  few  days  later,  in  accordance  with  this 
good  resolution,  the  Directors  appointed  S.  S.  Green  and  Joseph  C. 
Riddle  to  recruit  for  the  first  and  second  Board  of  Trade  regiments. 

A  call  for  300,000  men  was  issued  by  President  Lincoln,  Octo- 


306  HISTORY  OF  THE  BOARD  OF  TRADE  [1864] 

ber  17,  1863.  The  quota  of  Chicago  under  this  call  was  about  3,000, 
and  it  was  hoped  that  enough  volunteers  could  be  found  before 
January  5,  1864,  at  which  date  it  was  announced  a  draft  would 
begin,  to  make  up  the  deficiency,  if  any  should  then  exist.  The 
enthusiasm,  which  in  the  early  days  induced  so  many  to  volunteer, 
was  lacking,  and  although  the  quota  was  finally  furnished  and  a 
draft  avoided,  it  was  only  after  an  extension  of  time  had  been 
secured.  Probably  the  energetic  work  of  the  Board  of  Trade  con- 
tributed more  to  the  success  of  this  effort  than  any  other  agency. 

The  costly  victory  won  by  the  Confederates  at  Chickamauga, 
on  the  19th  and  20th  of  September,  was  the  only  important  inter- 
ruption to  the  Union  successes  in  the  last  half  of  the  year  1863. 
Even  this  was  barren  of  result,  for  two  months  later  Hooker 
stormed  Lookout  Mountain  and  Grant  carried  Mission  Ridge, 
driving  the  remnant  of  Bragg's  army  across  the  battlefield  of 
Chickamauga,  where  it  had  triumphed  in  the  early  autumn.  The 
Confederacy  showed  great  vitality,  but  that  its  death  wounds  were 
received  at  Gettysburg  and  Vicksburg  was  now  apparent.  Its 
army  under  Lee  was  capable  of  making  desperate  resistance,  but 
in  the  West  great  gain  had  been  made  by  the  Union  forces,  and 
furthermore  the  credit  of  the  Confederacy  was  rapidly  sinking. 

Notwithstanding  the  enormous  expenditures  involved  in  prose- 
cuting the  war,  gold  closed  in  New  York  on  the  last  day  of  1863  at 
a  premium  of  51%. 

The  Directors  of  the  Board  of  Trade  having  changed  the  statis- 
tical year  to  make  it  correspond  with  the  fiscal  year  of  the  Board, 
the  Secretary  deferred  his  report  for  1863  until  the  31st  of  March, 
1864. 

1864 

The  early  months  of  1864  were  months  of  preparation  for 
the  great  military  campaigns  which  careful  observers  felt  must 
result  in  victory  for  the  Union  armies,  unless  the  rising  tide  of 
discontent  in  the  North  should  paralyze  the  efforts  of  soldiers  in 
the  field.  In  the  Southern  Confederacy  every  available  man  and 
boy  was  forced  into  the  ranks,  and  every  possible  efifort  made  to 
avert  the  doom  which  many  of  those  who  were  still  attached  to  its 
fortunes  saw  impending.  If  the  depreciation  of  the  "greenbacks" 
had  embarrassed  the  United  States  Treasury,  financial  conditions  in 
the  Southern  Confederacy  were  infinitely  worse.  At  no  time  since 
the  "greenbacks"  were  issued  had  tliey  been  worth  less  than  62 
cents  in  gold,  while  Confederate  currency  before  the  close  of  the 
year  1863  was  worth  less  than  six  cents  of  its  face  value  in  gold. 

Four  months  of  the  new  year  passed  before  the  great  campaigns 
directed  by  General  Grant  and  General  Sherman  were  fairly  under 
way.  The  gold  premium  began  to  rise  slowly  soon  after  the  turn 
of  the  year  and  on  the  first  of  July,  1864,  touched  $1.85  under  the 


[1864]  OF  THE  CITY  OF  CHICAGO  307 

combined  influence  of  the  desperate  resistance  offered  by  the  Con- 
federates under  General  Lee,  and  an  unwise  attempt  on  the  part 
of  Congress  to  prohibit  contracts  for  the  purchase  and  sale  of  gold 
for  future  delivery. 

The  first  annual  meeting  of  the  Chamber  of  Commerce  was 
held  on  the  1st  of  March,  1864.  The  following  officers  were  elected  : 
President,  R.  M.  Hough;  Vice-President,  V.  A.  Turpin;  Treasurer, 
J.  V.  Farwell.  The  Board  of  Directors  chosen  at  this  meeting  was 
composed  largely  of  members  of  the  Board  of  Trade,  and  the  two 
organizations  being  now  of  one  mind  as  to  future  action,  the  Board 
of  Trade  voted  in  favor  of  the  "Baptist  Church"  lot  on  the  south- 
east corner  of  Washington  and  LaSalle  streets.  Subscriptions  to 
the  stock  of  the  Chamber  of  Commerce  being  called  for  and  limited 
for  ten  days  to  members  of  the  Board,  nearly  the  whole  amount 
required  was  subscribed  within  the  time  indicated.  On  the  8th 
of  March,  1864,  it  was  announced  in  the  daily  newspapers  that  the 
Baptist  Church  property  had  been  purchased,  and  preparations 
were  under  way  for  construction  of  the  new  Exchange. 

The  sixteenth  annual  meeting  of  the  Board  of  Trade  was  held 
April  4,  1864,  President  John  L.  Hancock  in  the  chair.  The  total 
receipts  for  the  year  were  $45,908.21 ;  expenditures,  $41,909.82.  Bal- 
ance on  hand,  $3,998.39.  The  War  Fund  Committee  had  a  balance 
on  hand  of  $5,129.79.  Thomas  Parker  was  elected  First  Vice- 
President.  C.  J.  Gilbert  was  elected  Second  Vice-President.  There 
were  three  candidates  for  President,  none  of  whom  received  a 
majority.  Mr.  R.  McChesney  withdrew  his  name  as  a  candidate, 
and  at  the  adjourned  election  on  the  following  day  John  L.  Hancock 
was  re-elected  President  by  a  vote  of  392  to  247  for  Charles  Ran- 
dolph. 

There  was  at  this  time  a  quantity  of  currency  in  circulation 
issued  by  banks  in  many  States,  some  of  it  good  and  some  open  to 
suspicion.  Mr.  Ira  Y.  Munn  introduced  a  resolution  to  the  effect 
that  "on  and  after  the  1st  inst.,  all  transactions  by  members  of  this 
Board  shall  be  for  United  States  legal  tender  notes,  and  national 
bank  notes,  or  their  equivalent."  The  resolution  did  not  pass,  but 
at  a  meeting  of  the  Board  on  the  11th  of  April  it  was  agreed  to 
and  the  Board  of  Trade  again  threw  its  influence  in  favor  of  sound 
money. 

The  Directors  having,  as  previously  stated,  changed  the  statis- 
tical year  to  conform  with  the  fiscal  year  of  the  Board,  Secretary 
Beaty's  report  under  date  of  April  1,  1864,  covers  the  period  from 
April  1,  1863,  to  date.  He  gives  in  separate  tables  the  inward  and 
outward  movement  of  the  principal  articles  of  produce  for  the  first 
quarter  of  1863,  but  it  is  unnecessary  to  refer  to  these  for  purposes 
of  comparison.  He  reports  the  membership  of  the  Board  of  Trade 
as  1,261,  and  congratulates  the  organization  "upon  a  year  of  unex- 
ampled prosperity." 


308  HISTORY  OF  THE  BOARD  OF  TRADE  [1864] 

The  storage  capacity  increased  greatly  during  the  fifteen 
months  which  had  elapsed  since  the  last  report  on  December  31, 
1862,  the  following  large  elevators  having  been  built :  Steel  & 
Taylor,  1,250,000  bushels;  Flint  &  Thompson,  1,250,000  bushels; 
Armour,  Dole  &  Co.,  800,000  bushels,  making  the  total  capactiy  of 
Chicago  elevators  more  than  ten  million  bushels  of  grain. 

Wheat  and  Flour 

The  movement  of  wheat  and  flour  for  the  year  ending  March 
31,  1864,  was  smaller  than  in  the  year  1862,  attributable  to  the  light 
crop  of  that  year,  and  to  the  slow  movement  to  market  of  the  crop 
of  1863,  which  the  scarcity  of  agricultural  laborers  in  the  North- 
west rendered  inevitable.  A  noticeable  feature  of  the  wheat  trade 
of  the  year  was  that  Northern  Iowa,  Northern  Wisconsin  and 
Southern  Minnesota  contributed  an  increasing  proportion  of  the 
receipts,  improving  thereby  the  quality  of  Chicago  wheat,  and  bat- 
tering its  reputation  in  Eastern  and  European  markets. 

Receipts  and  shipments  of  flour  and  wheat  for  the  year  1863-4 
as  follows:  Receipts — Flour,  barrels,  1,424,055;  wheat,  bushels, 
12,461,554.  Shipments— Flour,  barrels,  1,507,816;  wheat,  bushels, 
10,759,152.  Less  flour  was  manufactured  in  Chicago  in  1863-4  than 
in  the  previous  statistical  year,  the  number  of  barrels  as  reported 
by  Secretary  Beaty  being  223,123,  against  260,980  in  1862. 

The  price  of  wheat  fluctuated  widely.  No.  2  spring  wheat, 
which  advanced  from  88  cents  in  January  to  $1.12  in  March,  declin- 
ing again  to  80  cents  in  August,  partly  on  account  of  the  fall  in 
gold  caused  by  the  victories  at  Gettysburg  and  Vicksburg,  and 
partly  on  account  of  the  good  crop  prospects.  From  this  minimum 
there  was  an  advance  to  $1.15  in  October,  and  the  price  did  not 
sink  below  $1.02  again  during  the  year  1863,  and  in  the  week  ending 
March  26,  1864,  it  was  steady  at  $1.11. 

Com 

Owing  to  severe  frosts  in  August  and  September,  1863,  the 
autumn  and  winter  movement  of  corn  was  very  small,  and  the  total 
receipts  for  the  statistical  year  were  about  15  per  cent  less  than 
in  the  year  1862.  Receipts  were  25,160,516  and  shipments  24,906,- 
934  bushels.  The  price  of  corn  fluctuated  very  little  until  the 
damage  caused  by  the  frosts  about  the  first  of  September  was  real- 
ized, when  there  was  a  rapid  advance,  which  culminated  about  the 
middle  of  November  at  98  cents  per  bushel  for  No.  2  corn  and  99 
cents  for  No.  1.  This  was  about  double  the  price  which  prevailed 
during  the  spring  and  early  summer. 

Oats 

The  falling  ofif  in  receipts  of  flour  and  wheat  was  compensated 
for  by  an  extraordinary  increase  in   receipts  of  oats,   due  to   the 


[1864]  OF  THE  CITY  OF  CHICAGO  309 

requirements  of  the  army.  The  high  prices  stimulated  production, 
and  farmers  used  other  grains  for  feeding,  as  far  as  practicable, 
and  marketed  their  oats  more  closely  than  ever  before.  Receipts 
were  11,005,743  and  shipments  were  9,909,175  bushels.  Prices 
fluctuated  widely,  as  might  be  expected.  Sympathizing  with  the 
corn  market,  oats  were  comparatively  steady  in  April,  May,  June 
and  July,  the  demand  for  army  use  keeping  them  five  to  ten  cents 
per  bushel  above  the  price  of  corn.  As  the  weight  of  a  bushel  of 
corn  is  56  pounds  and  the  weight  of  a  bushel  of  oats  32  pounds, 
one  pound  of  the  latter  was  worth,  at  this  time,  about  twice  as 
much  as  a  pound  of  corn.  Nearly  all  the  army  contracts  for  oats 
were  filled  by  purchases  on  the  Board  of  Trade  of  the  city  of 
Chicago. 

Influenced  by  the  same  causes  which  produced  a  decline  in 
wheat  after  the  great  battles  of  Vicksburg  and  Gettysburg,  and  by 
the  abundant  crop  then  being  gathered,  No.  1  oats  declined  from 
the  55@60  cent  range  they  had  maintained  up  to  the  latter  part  of 
July,  to  20y2@  31  cents,  about  the  middle  of  August,  advancing 
again  after  frosts  had  damaged  the  corn  crop  to  72  cents  per  bushel 
in  October.  The  price  at  the  close  of  year  1863  was  66  cents,  and 
in  the  last  week  of  March,  1864,  about  65  cents  per  bushel. 

Rye 

Receipts  of  rye  showed  a  falling  olif  of  more  than  25  per  cent, 
the  high  price  of  corn  during  most  of  the  statistical  year  causing 
a  great  increase  in  the  demand  for  rye  from  distilleries.  Receipts 
and  shipments  of  rye  were  747,295  and  shipments  683,946  bushels 
respectively.  The  price  of  No.  1  rye  advanced  about  20  cents  a 
bushel  in  the  early  part  of  1863,  but  in  sympathy  with  wheat  and 
oats  declined  from  80  cents  in  April  to  53@55  cents  in  the  latter 
part  of  August.  The  frosts  which  destroyed  so  much  of  the  corn 
crop  about  September  1,  caused  another  advance  in  rye,  which 
sympathized  with  corn.  This  advance  did  not  culminate  until  about 
the  middle  of  December,  when  the  minimum  price  just  mentioned 
was  doubled.  No.  1  rye  reaching  $1.07  per  bushel.  At  the  close  of 
the  statistical  year  it  was  quoted  at  $1.03. 

Barley 

The  barley  crop  of  1863  was  good,  both  in  quality  and  yield, 
and  the  movement  for  the  year  showed  a  large  increase. 

Receipts  and  shipments  of  barley  were  1,244,584  and  943,252 
bushels  respectively.  After  a  sharp  advance  in  the  early  part  of 
1863,  barley  in  sympathy  with  other  cereals  declined  during  the 
summer,  and  the  grade  of  No.  2  was  quoted  about  the  middle  of 
August  at  68  cents  per  bushel  in  store.  Like  the  other  grains,  too, 
its  price  was  affected  by  the  frost,  and  the  advance  culminated  in 
December,  when  the  same  grade  brought  $1.26  in  store.     In  the 


310  HISTORY  OF  THE  BOARD  OF  TRADE  [1864] 

week  ending  March  26,  1864,  the  last  week  of  the  statistical  year,  it 
was  steady  at  $1.23@1.23J^. 

The  Provision  Trade 

Receipts  of  hogs  showed  a  material  increase  over  the  year  1862, 
but  the  scarcity  in  eastern  markets  resulted  in  so  great  a  demand 
from  the  butchers  of  New  York,  Philadelphia  and  other  eastern 
cities,  that  the  fifty-eight  packing  firms  in  Chicago  packed  only 
904,659  hogs  during  the  season  of  1863-4,  against  a  total  of  970,264 
during  the  preceding  season.  (It  will  be  observed  that  the  com- 
parison is  not  made  with  the  year  1862,  when  the  number  packed 
was  842,515.)  Cragin  &  Co.  again  head  the  list  of  packers,  closely 
followed  by  the  firm  of  A.  E.  Kent  &  Co.  The  only  firms  which 
packed  more  than  50,000  hogs  were:  Cragin  &  Co.,  95,556;  A.  E. 
Kent  &  Co.,  82,514;  Griffin  Bros.,  50,133.  The  receipts  and  ship- 
ments of  hogs  were  as  follows:  1,677,757  and  856,485  respectively. 
Perhaps  the  most  noticeable  feature  of  the  trade  was  the  increase 
in  percentage  of  dressed  hogs,  which  were  nearly  one-fifth  of  the 
whole  number.  The  price  of  live  hogs  fluctuated  in  sympathy  with 
the  corn  market,  declining  from  the  middle  of  April  until  the  middle 
of  August,  when  the  quotations  were  $3@3.75  per  hundred  pounds. 
The  market  became  firmer  during  the  last  week  in  August,  and  with 
occasional  recessions  continued  to  advance  until  the  last  week  in 
March,  1864,  when  the  range  was  $5.75@7.75,  or  about  double  the 
prices  quoted  before  the  frosts  of  late  August  and  early  September, 
1863.  Pork  product  followed  the  price  of  hogs,  mess  pork  being 
quoted  in  June,  1863,  at  $11  per  barrel  and  in  March,  1864,  at  $22. 
During  the  year  under  review  Chicago  snatched  from  Cincinnati, 
long  known  as  the  Porkopolis  of  the  United  States,  leadership  in 
the  pork  trade,  which  she  has  ever  since  retained,  having  already 
taken  first  place  as  a  cattle  packing  and  shipping  point 

Thirteen  firms  packed  during  the  season  70,086  cattle  against 
59,687  packed  in  1862.  Of  these  Wooster,  Hough  &  Co.  packed 
13,000,  Cragin  &  Co.  12,012,  A.  E.  Kent  9,260,  and  G.  S.  Hubbard 
&  Co.  9,435. 

Receipts  of  cattle  were  300,622  and  shipments  were  187,068. 
As  in  the  case  of  other  commodities  prices  were  lowest  just  before 
the  frosts,  and  highest  towards  the  close  of  the  statistical  year, 
the  range  for  choice  cattle  being  $4@7  per  hundred  pounds. 

Lumber 

The  receipts  of  lumber  during  the  year  were  413,301,818  square 
feet,  an  increase  of  107,627,773  square  feet  over  the  year  1862.  The 
season  was  one  of  unexampled  prosperity  in  the  lumber  trade. 
There  was  a  sharp  advance  in  the  price  of  the  best  grades  of  lum- 
ber, but  little  change  in  poorer  qualities. 


[1864]  OF  THE  CITY  OF  CHICAGO  311 

Seeds 

The  trade  in  grass  seeds  and  flax  showed  a  fair  increase,  as 
shown  in  the  receipts  of  9,885,208  and  shipments  of  7,754,656  pounds. 
Prices  were  influenced  by  other  considerations  than  those  which 
controlled  the  market  for  the  more  important  articles  of  produce, 
but  as  a  rule  highest  quotations  were  made  near  the  end  of  the 
statistical  year. 

Salt 

There  was  a  large  increase  in  the  amount  of  salt  handled  in 
Chicago,  receipts  for  the  statistical  year  having  been  775,364  bar- 
rels, against  612,003  in  1862,  and  shipments  579,694  barrels,  against 
520,227  in  1862. 

Hides 

Few  lines  of  trade  showed  so  great  an  increase  as  the  trade  in 
hides.  Receipts  for  the  statistical  year  were  17,557,728  pounds, 
against  12,747,123  pounds  in  1862.  Shipments  were  23,781,979 
pounds,  against  15,315,359  pounds  in  1862.  In  both  cases  the  excess 
of  shipments  over  receipts  was  due  to  the  large  number  of  cattle 
slaughtered  in  Chicago.  The  hides  from  these  cattle  exceeded  the 
demand  from  local  tanneries. 

High  Wines 

Receipts  of  this  commodity  were  137,947  barrels  and  shipments 
were  159,312.  Four  large  distilleries  in  Chicago  produced  4,850,022 
gallons  of  high  wines,  an  amount  almost  equal  to  the  receipts,  thus 
accounting  for  the  excess  of  shipments  over  receipts. 

Freights 

The  railroad  tarifif  on  grain  to  New  York,  which  was  $1.05  per 
hundred  pounds  in  January,  1863,  and  90  cents  in  March,  was 
reduced  to  55  cents  in  August,  and  advanced  to  $1.10  in  December. 
It  was  $1  in  the  latter  part  of  March,  1864,  at  the  close  of  the  statis- 
tical year.  Lake  freights  to  Buffalo  were  as  low  as  4  cents  per 
bushel  on  wheat  and  3^/2  cents  on  corn  in  August,  and  as  high  as 
13  cents  on  wheat  in  the  latter  part  of  October. 

Late  in  the  winter  of  1863-4  the  city  newspapers  began  to  pub- 
lish quotations  of  grain  and  high  wines  at  the  evening  meetings  held 
in  the  Tremont  House  saloon,  where  many  members  of  the  Board 
of  Trade  were  accustomed  to  congregate.  High  wines  offered  an 
unusual  opportunity  to  the  speculative  fraternity  at  this  time, 
because  it  was  uncertain  whether  the  bill  then  pending  in  Congress 
would  or  would  not  tax  stocks  of  high  wines  on  hand,  as  well  as 
those  to  be  manufactured  in  the  future.  If  only  high  wines  of  future 
manufacture  should  be  taxed,  those  who  held  stocks  on  hand  would 
reap  a  rich  harvest.     On  Wednesday  evening,  April  13,  the  saloon 


312  HISTORY  OF  THE  BOARD  OF  TRADE  [1864] 

of  the  Tremont  House  was  so  crowded  that  a  large  portion  of  the 
operators  went  to  the  exchange  room  of  the  Sherman  House,  where 
they  continued  their  business  and  made  their  headquarters  in  future. 

The  Governor  of  the  State  of  Illinois  having  issued  a  call  for 
20,000  men  to  serve  one  hundred  days,  a  meeting  of  the  Board  of 
Trade  was  held  April  28,  1864,  at  which  the  members  pledged  them- 
selves that  they  would,  "as  far  as  practicable,  retain  the  situations 
of  those  who  may  enlist,"  and  "upon  their  honorable  discharge,  rein- 
state them  in  the  positions  they  occupied  before  enlisting."  An 
appropriation  was  made  of  $2.50  per  week  for  each  needy  family  of 
a  soldier,  such  money  to  be  paid  from  the  funds  of  the  Board. 

Many  of  the  most  influential  banks  and  bankers  of  the  city  were 
opposed  to  the  action  taken  by  the  Board  of  Trade  with  regard 
to  the  so-called  "wild-cat"  currency,  and  tried  to  induce  the  Board 
to  rescind  its  resolutions  and  consent  to  a  postponement  of  the 
adoption  of  a  "legal  tender"  basis,  until  July  1.  A  meeting  of  the 
Board  was  held  on  the  22d  of  April  to  consider  this  question,  but 
the  members  were  firm  in  their  resolve  to  adhere  to  the  15th  of 
May,  as  they  had  before  determined.  The  National  bankers  were 
in  favor  of  the  date  adopted  by  the  Board  of  Trade,  but  some  other 
bankers  were  anxious  to  postpone  action  as  long  as  possible,  and 
the  latter  forced  the  bankers'  meeting  to  go  on  record  in  favor  of 
July  1.  This  move  by  the  bankers  was  distasteful  to  those  members 
of  the  Board  of  Trade  who  were  in  favor  of  sound  money  with  which 
to  transact  business,  and  on  the  10th  of  May  a  paper  was  circulated 
at  a  meeting  of  the  Board  and  numerously  signed  pledging  the 
signers  "not  to  transact  any  business  on  and  after  Monday  next, 
except  on  a  'greenback'  basis."  Before  the  close  of  the  following 
day  one  hundred  and  twelve  prominent  Board  of  Trade  firms  and 
individual  members  had  signed  this  pledge.  The  bankers  sub- 
mitted, and  on  the  morning  of  the  12th  the  "Tribune"  announced  on 
its  first  page  that  "every  effort  made  to  break  down  and  nullify  the 
resolution  of  the  Board  of  Trade  has  signally  failed."  The  rail- 
roads and  express  companies  joined  the  movement,  and  on  the  fol- 
lowing Monday  (the  16th)  members  of  the  Board  of  Trade  had  the 
satisfaction  of  seeing  the  successful  inauguration  of  this  great  reform 
in  which  they  had  taken  a  leading  part. 

The  great  campaigns  conducted  by  General  Grant  and  General 
Meade  in  Virginia,  and  by  General  Sherman  in  Georgia,  were  begun 
almost  simultaneously.  Grant  crossing  the  Rapidan  May  4,  while 
on  the  next  day  Sherman  moved  southward  from  Chattanooga. 
The  Richmond  "Examiner"  said,  about  this  time:  "If  we  hold  our 
own  in  Virginia  until  summer  is  ended  the  North's  power  of  mis- 
chief everywhere  will  be  gone.  If  we  lose,  the  South's  capacity 
for  resistance  will  be  broken.  *  *  *  This  is  the  last  year  of  the 
war,  whichever  wins." 

The    constant    forward    movement   of    both    the    great    Union 


[1864]  OF  THE  CITY  OF  CHICAGO  313 

armies  during  the  month  of  May  gave  encouragement  to  the  hope 
of  an  early  and  complete  triumph,  although  the  loss  of  life  in  the 
Wilderness  and  at  Spottsylvania  was  without  precedent  in  so  short 
a  campaign.  When  to  these  losses  were  added  the  useless  sacrifice 
at  Cold  Harbor,  and  the  certainty  that  Richmond  could  be  taken 
only  by  siege,  great  disappointment  was  felt  throughout  the  North, 
and  discontent  was  found  in  unexpected  quarters.  A  political  cam- 
paign was  impending,  and  Mr.  Lincoln,  his  party,  and  the  generals 
in  the  field,  were  vilified  in  the  most  unscrupulous  manner  by  those 
who  hoped  to  defeat  the  Republicans  at  the  November  election  and 
bring  about  peace  upon  terms  acceptable  to  the  sorely  pressed 
Confederates. 

The  speculation  in  gold  coin  had  grown  to  such  proportions 
that  a  Gold  Exchange  was  opened  in  New  York,  and  as  it  was 
virtually  trading  in  the  credit  of  the  United  States  Government, 
and  as  secret  enemies  were  suspected  of  bidding  up  the  premium 
for  the  purpose  of  injuring  the  public  credit,  a  bill  was  enacted  by 
Congress  June  17,  1864,  to  stop  a  practice  which  was,  in  the  minds 
of  many,  a  public  scandal.  "This  act  declared  unlawful  any  con- 
tract to  purchase  or  sell  gold  to  be  delivered  on  any  day  subsequent 
to  the  making  of  the  contract ;  it  also  forbade  the  purchase  or  the 
sale  of  foreign  exchange  to  be  delivered  at  any  time  beyond  ten 
days  subsequent  to  the  making  of  such  contract ;  or  the  making 
of  any  contract  for  the  sale  and  delivery  of  any  gold  coin  or  bullion 
of  which  the  person  making  such  contract  was  not  at  the  time  of 
making  it  in  actual  possession."     (Dewey,  296.) 

The  effect  of  the  gold  bill  was  directly  opposite  to  what  its 
promoters  expected.  Within  two  weeks  the  gold  premium  doubled, 
and  on  the  1st  of  July  a  gold  dollar  was  worth  $2.85  in  greenbacks; 
or,  in  other  words,  the  greenback  was  worth  a  little  more  than  35 
cents  in  gold.  The  situation  became  intolerable,  and  the  law  was 
repealed  fifteen  days  after  its  passage.  Of  course  the  excitement 
was  intensified  by  the  check  which  General  Grant's  army  had 
received  at  Cold  Harbor,  and  all  the  flurry  was  not  chargeable  to 
the  gold  bill.  The  extreme  figure  noted  above  was  temporary,  and 
the  pretext  given  for  the  sudden  advance  was  the  resignation  of 
the  Secretary  of  the  Treasury,  which  became  known  on  the  morn- 
ing of  July  1st.  When  the  appointment  of  Senator  Fessenden  as 
Secretary  of  the  Treasury  to  succeed  Secretary  Chase  was  an- 
nounced, confidence  was  restored,  the  price  of  gold  dropped  to 
$2.55,  and  on  the  following  day  to  $2.30,  upon  receipt  of  a  rumor 
that  Congress  had  repealed  the^old  bill.  It  will  be  understood 
that  these  figures  represent  tlfe  price  of  the  gold  dollar  and  not  the 
premium,  which  was  of  course  $1  (nominal)  less.  Gold  again 
advanced  to  $2.76  on  the  7th,  owing  to  fear  that  President  Lincoln 
would  not  sign  the  act  repealing  the  gold  bill.  It  touched  $2.84 
again  on  the  Uth  owing  to  General  Early's  raid  into  Maryland  and 


314  HISTORY  OF  THE  BOARD  OF  TRADE  [1864] 

threatened   attack   upon   Washington,    only    to    decline   when    the 
Confederates  were  driven  across  the  Potomac. 

A  new  call  for  500,000  men  issued  on  the  18th  of  July  was 
evidence  that  the  end  of  the  war  was  some  distance  in  the  future, 
and  prevented  a  serious  decline  in  the  gold  premium.  As  an 
advance  in  gold  inflated  prices  of  all  commodities,  and  a  decline 
caused  loss  to  the  holder  of  goods  of  every  description,  it  is  easy 
to  see  how  merchants  who  were  lukewarm  supporters  of  the  Gov- 
ernment, as  well  as  those  thoroughly  hostile  to  it,  might  find  their 
pecuniary  interest  on  the  side  of  the  country's  enemies. 

On  the  10th  of  September  the  cornerstone  of  the  Chamber  of 

Commerce,  which  was  expected  to  be  the  home  of  the  Board  of 

Trade  for  ninety-nine  years,  and   for  which   an   annual   rental   of 

$20,000  was  agreed  upon,  was  laid  with  great  ceremony,  including 

^_the  inevitable  street  procession. 

I  The  Democratic  presidential  convention  met  in  Chicago  on  the 

29th  of  August,  and  the  violent  harangues  of  those  who  demanded 

,A^1   that  the  "usurper"   (Lincoln)  "be  hurled  from  power"  encouraged 

/'^   I  the  "Knights  of  the  Golden  Circle,"  "Sons  of  Liberty"  and  other 

•^'^      I  treasonable  organizations  already  formed  in  southern  Illinois  and 

L Indiana,  and  who  boasted  of  their  ability  to  marshal  several  hun- 
dred thousand  men  to  resist  the  prosecution  of  the  war. 
'*"  Even  this  menace  of  a  new  diversion  in  favor  of  the  Confed- 
eracy could  not  stay  the  downward  course  of  the  gold  market  when 
the  news  came  that  Sherman  had  captured  Atlanta  on  the  2nd  of 
September,  and  Sheridan  was  sweeping  the  rebels  out  of  the  Shen- 
andoah Valley,  Sheridan's  great  victory  at  Fisher's  Hill  on  the 
22nd  of  September,  being  followed  on  the  24th  by  a  break  in  the 
gold  market  to  $1.99.  The  "Tribune's"  review  of  Board  of  Trade 
afifairs  on  that  day  says : 

"The  Board  of  Trade  rooms  today,  for  upwards  of  two  hours, 
presented  a  scene  of  the  most  indescribable  confusion.  In  the 
early  part  of  the  morning  the  telegraph  wires  were  down,  and  no 
report  of  gold  having  been  received,  operators  worked  cautiously 
in  the  dark ;  but  as  soon  as  the  dispatches  began  to  arrive,  a  wild 
panic  set  in,  which  has  only  been  equaled  in  a  few  instances  in  the 
history  of  the  grain  trade  of  our  city." 

It  was  found  impossible  to  secure  enough  volunteers  to  fill 
the  quota  of  Cook  County  under  the  last  call  for  troops,  and  drafting 
began  September  26th,  the  county  being  then  in  arrears  1,650  men 
(Colbert,  p.  96).  The  deficiency  was  greater  in  some  wards  than 
in  others,  but  not  a  ward  in  the  city  had  furnished  its  full  quota. 
Most  wards  had  a  local  committee  who  furnished  substitutes  for 
the  conscripts;  and  members  of  the  Board  of  Trade  were  so  fully 
occupied  with  the  work  of  these  local  organizations  that  they  had 
no  time  or  strength  to  push  the  Association  as  a  whole  into  the 
task  of  recruiting. 


[1864]  OF  THE  CITY  OF  CHICAGO  31S 

The  next  business  day  gold  was  down  to  $1.85  and  panic  again 
reigned  on  the  Board  of  Trade.  On  the  12th  of  November,  just  after 
the  presidential  election,  gold  was  forced  up  to  $2.69^,  but  it  was 
plainly  due  to  manipulation  and  the  price  soon  receded. 

The  next  two  months  were  full  of  thrills.  General  Sherman 
began  his  famous  March  to  the  Sea,  on  the  15th  of  November;  on 
the  30th  Schofield  defeated  the  Confederates  with  great  loss  at 
Franklin;  on  the  15th  and  16th  of  December,  General  George  H. 
Thomas  completed  the  destruction  of  Hood's  army  at  Nashville, 
and  on  the  10th  Sherman  reached  Savannah,  of  which  he  took  pos- 
session on  the  21st.  His  triumphal  march  through  the  heart  of 
the  Confederacy,  to  which  the  enemy  was  unable  to  oppose  any 
effective  resistance,  showed  unmistakably  that  the  end  was  near. 

The  End  of  the  War 

The  new  year  saw  the  military  power  of  the  Confederacy 
broken  everywhere  except  in  Virginia  and  the  Carolinas.  No  more 
recruits  could  be  had  to  fill  the  ranks  of  the  hungry  and  desperate 
army  under  Lee's  command  at  Richmond  and  Petersburg.  Ade- 
quate supplies  of  food  and  ammunition  were  cut  off  from  the 
remnants  of  those  armies  which  for  nearly  four  years  had  defied 
the  soldiers  of  the  Union.  It  was  evident  that  as  soon  as  Lee  could 
be  forced  to  abandon  the  great  fortress  which  had  sheltered  his 
depleted  ranks  since  the  middle  of  the  preceding  summer,  the  end 
would  come.  And  yet  the  eventful  year  1864  closed  with  the  gold 
dollar  worth  $2.26^^.  The  military  situation  was  still  the  dominant 
factor  in  determining  the  course  of  gold,  but  the  600  or  700  millions 
of  currency  then  in  circulation,  and  believed  by  most  financiers 
to  be  far  in  excess  of  the  needs  of  commerce,  was  a  potent  influence. 

The  capture  of  Fort  Fisher,  near  Wilmington,  N.  C,  on  the 
15th  of  January,  was  the  first  in  a  series  of  momentous  events 
which  caused  the  premium  on  gold  to  decline,  until  on  the  10th  of 
April,  the  day  after  Lee's  surrender,  gold  coin  touched  $1.44.  The 
Chicago  "Tribune"  of  January  21st,  reviewing  the  Chicago  mar- 
kets of  the  previous  day,  says:  "The  panic  in  gold  in  New  York 
today  spread  to  this  city,  and  the  value  of  almost  every  merchanta- 
ble article  was  correspondingly  affected  thereby.  Pork  declined 
$2  to  $3  per  barrel  and  wheat  fell  10@12  cents  per  bushel." 

On  the  1st  of  March  it  was  rumored  that  Lee  was  preparing' 
to  evacuate  Richmond  and  gold  fell  to  $1,993^,  touching  $2  for  the 
last  time.  During  the  week  ending  March  15th,  Sherman's  irre- 
sistible progress  through  the  Carolinas,  and  Sheridan's  successes 
in  the  upper  Shenandoah  Valley,  caused  another  break  of  20  per 
cent  in  the  gold  market,  with  the  usual  accompaniment  of  panic 
in  all  articles  of  produce.  Even  this  was  only  the  beginning  of  a 
further  decline,  which  in  little  more  than  a  fortnight  cut  another 
30  per  cent  from  the  premium  as  the  war  was  brought  to  a  close 


316  HISTORY  OF  THE  BOARD  OF  TRADE  [18641 

by  the  capture  of  Richmond  and  the  surrender  of  General  Lee  with 
the  remnant  of  his  army.  The  day  after  this  event  gold  touched 
$1.45^,  showing  the  value  of  the  greenback  at  this  time  to  have 
been  about  68  3/5. 

The  course  of  the  gold  market  during  the  last  year  and  a  half 
of  the  war  has  been  described  at  some  length  because  it  was  the 
most  vital  fact  in  the  financial  and  commercial  world.  No  fore- 
cast of  future  prices  of  product  based  upon  the  factors  which 
usually  control  those  prices  was  worthy  of  a  moment's  considera- 
tion unless  it  took  account  of  the  probable  course  of  the  gold  mar- 
ket. A  trader's  knowledge  of  crops,  growing,  or  already  gathered, 
in  every  country  on  earth  might  have  been  accurate ;  his  estimate 
of  probable  demand  and  supply  very  near  the  truth ;  but  all  these 
data  were  worthless  unless  accompanied  by  an  accurate  forecast 
of  the  gold  fluctuations  in  the  immediate  future.  It  was  a  nerve- 
racking  time  for  members  of  the  Board  of  Trade. 

When  the  news  of  General  Lee's  surrender  was  received,  the 
members  of  the  Board  of  Trade,  like  the  other  loyal  citizens  of 
Chicago,  gave  up  their  usual  occupations  and  spent  the  day  rejoic- 
ing that  the  end  of  the  long  struggle  had  come,  and  that  the  old 
flag  was  triumphant  from  the  Atlantic  to  the  Pacific,  and  from 
the  Great  Lakes  to  the  Mexican  Gulf.  The  Board  met  as  usual, 
but  no  business  was  transacted.  The  universal  enthusiasm  found 
expression  in  the  waving  of  hats,  in  cheers,  in  speeches,  in  prayer, 
and  in  singing  "Praise  God  from  whom  all  blessings  flow,"  "Star 
Spangled  Banner,"  and  "My  Country,  'Tis  of  Thee."  Later  in  the 
day  there  was  a  great  procession  in  which  the  Board  of  Trade  took 
a  conspicuous  part. 

Even  the  annual  meeting  was  adjourned  until  the  following 
day,  when  the  election  resulted  in  the  choice  of  the  following  officers  : 
President,  Charles  Randolph ;  First  Vice-President,  T.  Maple ; 
Second  Vice-President,  John  C.  Dore.  The  adjourned  annual  meet- 
ing of  the  Board  of  Trade  for  the  statistical  year  1864-5  was  held 
on  the  11th  of  April,  1865,  when  the  directors  submitted  their 
report,  which  showed  total  receipts  for  the  fiscal  year  (including 
$3,998.39  balance  carried  over  from  last  year),  $59,999.15.  Dis- 
bursements were:  Inspectors  and  inspection  account,  $27,258.50; 
war  fund,  $12,427.57;  Mulligan  fund,  $1,000;  other  purposes, 
$2,342.49;  market  reports,  $3,681.30;  annual  reports,  $1,747.66;  Sec- 
retary's salary,  $4,000;  circulating  account,  $433.80;  contingent 
expenses,  rent,  fuel,  gas,  labor,  stationery,  etc.,  $6,899.26;  leaving 
a  cash  balance  of  $208.57. 

President  John  .L.  Hancock  in  retiring  cong'ratulated  the 
Board  that  so  few  failures  had  occurred  during  the  past  eight 
months,  in  which  the  premium  on  gold  declined  from  $1.92  to  47 
per  cent,  greatly  embarrassing  the  business  of  members  of  the 
Association.    He  expresses  his  great  satisfaction  "that  I  have  been 


£1864]  OF  THE  CITY  OF  CHICAGO  317 

so  closely  identified  with  this  reliable  and  patriotic  body  of  men 
since  the  breaking  out  of  the  war,  and  that  I  have  the  pleasure  of 
knowing  that,  under  the  auspices  of  this  Board,  great  good  has 
been  done  in  support  of  our  armies  and  the  Government  in  putting 
down  this  great  rebellion." 

The  Chamber  of  Commerce  building,  which  was  to  be  the 
future  home  of  the  Board  of  Trade,  was  not  completed,  but  the 
President  expressed  the  hope  that  it  might  be  ready  for  occupancy 
in  the  early  part  of  July. 

Secretary  John  T.  Beaty  reported  an  increase  of  200  in  the 
active  membership  of  the  Board,  and  the  most  successful  year  in 
its  history.  This  statement  is  remarkable  in  view  of  the  falling 
off  in  the  movement  of  important  cereals,  and  the  terrific  declines 
in  grain  and  provisions  due  to  the  fall  in  gold.  Possibly  the  ex- 
planation of  this  apparent  inconsistency  may  be  found  in  the  great 
development  of  the  speculative  trade,  to  which  the  good  Secretary 
and  apparently  the  officers  of  the  Board  were  much  opposed.  The 
Secretary  says :  "It  is  true  that  speculation  has  been  too  much  the 
order  of  the  day,  and  buyers  of  'long,'  'short'  and  'spot'  have  passed 
through  all  the  gradations  of  fortune,  from  the  lower  to  the  higher 
round,  and  in  many  instances  have  returned  to  the  starting  point, 
if  not  to  a  step  lower,  but  it  is  to  be  hoped  that  with  the  return  of 
peace  this  fever  of  speculation  will  abate,  and  trade  will  be  con- 
ducted on  a  more  thoroughly  legitimate  basis." 

The  origin  of  this  trade  in  "futures"  or  "options,"  as  they  were 
then  called,  has  been  already  described.  Its  first  marked  increase 
during  the  war  was  due  to  the  purchase  of  oats  for  future  delivery 
to  fill  contracts  made  with  the  Quartermaster's  Department  of  the 
United  States  Army.  Soon  after  the  premium  on  gold  began  to  rise, 
speculative  purchases  of  wheat,  corn,  oats,  pork  product  and  high 
wines  assumed  immense  proportions,  and  yet  the  daily  newspapers 
and  the  market  reports  of  the  war  period  will  be  searched  almost 
in  vain  for  the  quotations  at  which  these  transactions  were  made 
until  near  the  close  of  this  period,  when  an  occasional  sale  for  future 
delivery,  made  at  the  evening  meetings,  finds  its  way  into  the 
public  press.  There  were  all  sorts  of  deliveries  contracted  for, 
"seller's  option  five  days,"  "ten  days,"  "first  half"  or  "last  half" 
of  some  specified  month — "buyer's  option  five  days,"  ten  days  or 
longer  period.  The  conservative  men  who  controlled  affairs  at 
this  time,  however,  seemed  to  think  there  was  too  much  of  the  ele- 
ment of  chance  in  this  method  of  trade,  and  no  rules  governing 
the  making  and  settlement  of  those  contracts  were  made  until 
October  13,  1865. 

Warehouses 

The  only  change  in  the  storage  capacity  of  the  city  during  the 
year  was   the   elimination   of  one  small   house   of  75,000  bushels' 


318  HISTORY  OF  THE  BOARD  OF  TRADE  [1864] 

capacity  from  the  list,  leaving-  seventeen  warehouses  vwth  a  capacity 
of  9,935,000  bushels  at  the  close  of  the  fiscal  and  statistical  year 
1864-5. 

Flour  and  Wheat 

The  movement  of  wheat  and  flour  showed  a  decided  decrease. 
The  Secretary  attributes  the  falling  ofif  in  receipts  of  wheat  "to  a 
partial  failure  of  the  crop  in  Wisconsin  and  Illinois,  and  to  the 
low  stage  of  water  in  the  upper  Mississippi  River,  which  held 
back  some  wheat  from  Minnesota  and  northern  Iowa."  Among 
the  causes  of  the  crop  failure  he  gives  "the  midge,"  "the  chinch  bug," 
and  "the  rust."  The  movement  of  flour  and  gain  is  shown  in  the 
following  statement:  Receipts  of  flour  were  1,170,274  barrels  and 
of  wheat  10,888,436  bushels.  Shipments  were,  flour,  1,287,545 
barrels,  and  wheat,  10,249,330  bushels.  Nine  mills  in  Chicago 
manufactured  290,137  barrels  of  flour  against  223,123  barrels 
made  in  the  previous  year.  Of  the  total,  B.  Adams  &  Co.  led  with 
62,000  barrels,  followed  closely  by  the  Oriental  Mills,  50,000  bar- 
rels. The  violent  fluctuations  in  the  gold  premium  made  inevitable 
a  wide  range  in  the  price  of  wheat  during  the  year.  Starting  in 
April,  1864,  at  the  beginning  of  the  statistical  year,  at  $1.10j4  per 
bushel,  No.  2  spring  wheat  rose  to  $2.11J/2  in  the  early  part  of  July, 
and  declined  again  as  gold  went  down,  to  98  on  the  30th  of  March, 
1865.  No.  2  red  wheat  was  considerably  higher,  the  difference 
being  usually  from  8  to  15  cents  per  bushel. 

Corn 

There  was  an  astonishing  decrease  in  the  receipts  of  corn, 
"wholly  attributable,"  the  Secretary  says,  "to  the  failure  of  the 
crop  of  1863,  which  it  will  be  recollected,  was  nearly  destroyed  by 
early  frosts."  He  reports  the  crop  of  1864  a  fair  average  yield. 
Receipts  were,  in  fact,  the  smallest  since  1860,  having  been  13,197,- 
340  bushels,  only  little  more  than  half  as  much  as  the  preceding 
year.    Shipments  were  14,182,644  bushels. 

Like  wheat  and  all  other  commodities,  the  price  of  corn  ad- 
vanced rapidly  from  the  beginning  of  the  statistical  year  on  April 
1,  1864,  when  No.  2  corn  was  quoted  at  82j4  cents  per  bushel,  until 
the  early  part  of  July,  when  it  sold  as  high  as  $1.36^^.  Extreme 
scarcity  enabled  holders  to  keep  it  from  sympathizing  fully  with 
the  great  decline  in  gold,  and  after  falling  to  $1.17  in  October  it 
was  quoted  as  high  as  $1.40  about  the  middle  of  November.  Few 
quotations  are  given  after  the  middle  of  December,  when  it  was 
about  $1.  Probably  the  stock  of  old  corn  was  practically  exhausted 
and  the  new  corn  was  not  dry  enough  to  grade  No.  2.  Rejected 
corn  declined  30  to  35  cents  per  bushel  between  the  middle  of 
December,  1864,  and  the  25th  of  March,  1865,  and  it  may  be  as- 
sumed that  No.  2  corn  at  the  close  of  the  statistical  year  was 


[1864]  OF  THE  CITY  OF  CHICAGO  319 

nominally  below  70  cents  a  bushel.     It  sold  in  a  small  way  at  67 
cents,  "seller  first  half  of  April,"  on  the  30th  of  March,  1865. 

Oats 

In  sharp  contrast  with  the  diminished  movement  of  flour, 
wheat  and  corn,  was  the  largely  increased  movement  of  oats. 
Receipts  of  this  cereal  were  nearly  50  per  cent  more  than  in  the 
previous  year,  and  nearly  eight  times  as  much  as  in  the  year  1860. 

Receipts  and  shipments  of  oats  for  year  were,  respectively, 
16,365,440  and  16,470,929. 

In  addition  to  these  receipts  by  rail  and  canal,  it  was  estimated 
that  farmers'  teams  delivered  600,000  bushels.  The  active  demand 
for  army  use,  and  the  high  prices  which  had  prevailed  for  two 
years,  stimulated  the  production  of  oats  all  over  the  United  States, 
and  particularly  in  Illinois,  Iowa  and  Wisconsin,  the  region  tribu- 
tary to  Chicago.  Prices  were  so  high  at  the  beginning  of  the  sta- 
tistical year  under  review,  that  there  was  no  export  demand  for 
oats,  and  hence  they  did  not  fully  participate  in  the  wild  flight  of 
other  grains  which  accompanied  the  great  speculation  in  gold  in 
the  summer  of  1864.  No.  2  oats  were  quoted  as  low  as  61 J^  cents 
per  bushel  at  the  beginning  of  the  statistical  year,  and  the  highest 
price  reached  in  July,  just  before  the  gold  bubble  burst,  was  79 
cents.  After  that,  their  tendency  to  decline  as  the  gold  premium 
melted  away  was  held  in  leash  for  several  months  by  the  scarcity 
and  high  price  of  corn,  for  which  they  were  used  as  a  substitute 
wherever  practicable,  and  even  as  late  as  February,  1865,  No.  2 
oats  were  quoted  as  high  as  61  cents.  From  this  time,  however, 
as  the  end  of  the  war  came  into  view,  they  plunged  downward  in 
company  with  gold  and  everything  else  except  government  bonds 
and  "greenbacks,"  and  on  the  31st  of  Alarch,  1865,  they  were  down 
to  40  cents. 

Rye 

The  rye  crop  of  1864  was  abundant,  and  the  stoppage  of  many 
distilleries  through  the  west  diverted  large  quantities  of  this  grain 
to  Chicago.  These  two  facts  resulted  in  a  gratifying  increase  in 
receipts,  which  were  1,077,776  bushels  and  shipments  were  898,536 
bushels.  The  price  of  No.  1  rye  advanced  with  gold  and  other 
commodities  from  $1.02  per  bushel  at  the  beginning  of  April  to 
$1.50  in  July,  and  declined  again  with  them  to  65  cents  on  the  30th 
of  March,  1865. 

Barley 

An  inferior  crop  of  barley  in  the  country  tributary  to  Chicago 
in  1864  was  responsible  for  a  sharp  decrease  in  the  movement  at 
Chicago.  The  following  figures  indicate  the  extent  of  this  falling 
off:  Receipts  were  893,000  and  shipments  were  327,431  bushels. 
No.  2  barley  advanced  from  $1.25  at  the  beginning  of  April,  1864,  to 


320  HISTORY  OF  THE  BOARD  OF  TRADE  [1864] 

$2.40  about  the  middle  of  August,  and  declined  again  somewhat 
irregularly,  closing  the  statistical  year  below  $1  per  bushel. 

The  Provision  Trade 

The  disaster  to  the  corn  crop  of  1863  was  responsible  for  smaller 
receipts  of  hogs  at  all  the  western  packing  centers,  Chicago  included. 
The  only  compensation  for  the  reduced  business  was  the  knowledge 
that  Chicago  suffered  less  than  her  rivals,  and  that  about  one- 
third  of  the  packing  of  the  West  was  done  in  this  city,  the  number 
reported  by  the  Secretary  of  the  Board  of  Trade  being  760,514. 
The  following  are  the  figures  for  the  year:  Receipts,  1,410,320, 
and  shipments,  536,437.  Under  the  influence  of  the  advance  in 
other  commodities,  live  hogs,  which  were  quoted  early  in  April, 
1864,  at  $5@7.75  per  hundred  pounds,  advanced  to  $7.50@9.75, 
when  gold  was  highest  early  in  July.  Extreme  prices  of  the  year 
were  not  reached,  however,  until  September,  when  choice  hogs  sold 
as  high  as  $13  per  hundred  pounds,  as  they  did  again  in  December, 
1864,  and  in  February  and  March,  1865,  the  scarcity  of  meat  being 
a  more  potent  influence  than  the  price  of  gold. 

Pork  and  Beef 

Mess  pork  rose  from  $21.50  per  barrel  in  April,  1864,  to  $43 
early  in  July.  After  a  moderate  decline  it  again  reached  $43  in 
October,  sold  at  $40  in  December,  1864,  and  broke  to  $22.50  before 
the  close  of  the  statistical  year.  Lard  was  almost  equally  erratic 
in  its  movement,  advancing  from  12  cents  per  pound  for  prime  lard 
in  April  to  19  cents  in  July,  23)4  in  September,  and  at  the  close 
of  the  statistical  year  was  quoted  at  16j^  cents.  Mess  beef  advanced 
from  $14.50  at  the  beginning  of  April,  1864,  to  $22  per  barrel  in 
August,  and  declined  again  in  sympathy  with  the  fall  in  gold  and 
other  commodities  to  $15  in  October,  and  at  the  close  of  the  statis- 
tical year,  March  31,  1865,  was  nominally  $12@14  per  barrel. 

Cattle 

The  cattle  industry  was  less  affected  by  the  failure  of  the  corn 
crop  in  1863  than  was  the  raising  of  swine,  and  receipts  in  Chicago 
in  1864-5  showed  an  increase  over  the  previous  year.  A  greater 
number,  too,  were  packed  than  in  any  previous  year.  Thirteen 
packing  firms  and  individual  packers  put  up  92,459  cattle,  against 
70,086  in  1863-4.  Cragin  &  Co.,  with  16,134  head,  continued  to  lead 
in  this  branch  of  packing,  closely  followed  by  A.  E.  Kent  &  Co. 
with  14,394.  Culbertson,  Blair  &  Co.  and  Griffin  Bros.,  each  packed 
a  few  more  than  ten  thousand  head.  Receipts  and  shipments  of 
cattle  for  the  year  were  343,726  and  262,446  respectively. 

Lumber 

Another  great  increase  in  the  lumber  trade  is  shown  by  the  fol- 
lowing receipts  and  shipments  of  lumber,  which  were  respectively 


[1864]  OF  THE  CITY  OF  CHICAGO  321 

in  square  feet  501,592,406  and  269,496,579.  A  marked  advance  took 
place  in  the  best  grades  of  lumber,  while  "common"  lumber  showed 
little  change  in  price. 

Seeds 

There  was  a  slight  increase  in  the  movement  of  seeds,  and 
10,180,781  were  received  and  there  were  shipped  11,782,656  pounds. 
Prices  of  seeds  were  erratic,  the  advance  in  timothy  seed  culminat- 
ing in  August,  while  clover  seed  ruled  very  high  until  January, 
1865,  when  it  sold  at  $14.25  per  bushel. 

Salt,  Coal  and  Hides 

The  inward  and  outward  movement  of  these  articles  is  shown 
in  the  following  figures  :  Receipts — Salt,  680,346  barrels ;  coal,  284,- 
196  tons;  hides,  20,052,235  pounds.  Shipments — Salt,  483,448  bar- 
rels ;  coal,  16,779  tons ;  hides,  27,656,926  pounds.  Prices  of  salt  and 
hides  followed  the  general  price  movement  of  other  commodities ; 
but  bituminous  coal  continued  to  advance  throughout  the  year,  and 
anthracite  coal  was  about  50  per  cent  higher  in  March,  1865,  than 
in  April,  1864. 

High  Wines 

During  the  summer  and  fall  of  1864,  the  expectation  that  Con- 
gress would  increase  the  tax  on  high  wines  caused  a  great  specu- 
lation in  this  article,  and  distillers  and  others  carried  large  stocks 
in  anticipation  of  this  legislation.  When  the  bill  finally  became  a 
law  these  stocks  were  put  upon  the  market  for  sale  at  lower  prices 
than  the  cost  of  goods,  paying  the  increased  duty,  and,  as  a  result, 
the  manufacture  of  high  wines  in  the  West  almost  ceased  until  this 
surplus  was  absorbed.  The  quantity  manufactured  in  Chicago  fell 
from  77,524  barrels  in  1863-4  to  58,855  barrels  in  1864-5.  Receipts 
and  shipments  in  the  same  time  were  as  follows :  Receipts,  102,032 
barrels,  and  shipments,  138,644. 

Freights 

As  might  be  expected,  lake  freights  were  lowest  in  July,  when 
the  excitement  in  grain  caused  a  diminished  demand  for  vessel 
room,  7  cents  per  bushel  for  wheat  to  Buffalo,  and  6  cents  for  corn 
being  the  ruling  rates  at  that  time.  During  the  autumn  8@9  cents 
was  the  prevailing  rate  for  wheat,  and  1  cent  less  for  corn.  Late 
in  November  higher  rates  were  paid.  Rail  freights  to  New  York, 
which  were  90  cents  per  hundred  pounds  in  April,  1864,  declined  to 
75  cents  in  May,  and  then  advanced  continuously  until  December, 
when  $1.60  was  charged,  and  this  extreme  figure  was  maintained 
until  the  close  of  the  statistical  year,  March  31.  1865.  Perhaps  the 
high  price  of  coal  furnished  some  excuse  for  this  exorbitant  rate. 


322  HISTORY  OF  THE  BOARD  OF  TRADE  [1865] 

When  the  Civil  War  closed,  Chicago  was  firmly  entrenched 
in  the  position  she  had  won  during  that  contest  as  the  greatest 
primary  market  in  the  world  for  bread  and  meat,  two  indispensable 
needs  of  human  existence.  Nature  had  done  much  to  bring  about 
her  supremacy;  but  no  human  agency  contributed  so  much  to  the 
result  as  the  Board  of  Trade  of  the  city  of  Chicago. 

The  system  of  trading  in  "futures"  first  developed  on  the  floor 
of  the  Board  of  Trade,  and  for  a  long  time  ignored,  and  even  frowned 
upon  by  the  association,  has  been  introduced  into  other  exchanges 
throughout  the  world,  and  revolutionized  the  methods  of  business 
in  food  product,  benefiting  consumers  and  producers  alike.  If 
evils  have  been  disclosed  at  times,  as  the  result  of  over-development 
of  speculative  trading,  a  similar  charge  will  lie  against  every  human 
device  in  business,  politics,  or  social  organization.  On  the  whole, 
great  benefit  has  come  to  the  public  from  this  method  of  trading 
in  "futures,"  and  for  the  correction  of  its  incidental  evils,  no  body 
of  men  has  battled  more  strenuously  than  the  Board  of  Trade  of  the 
city  of  Chicago. 

1865 

While  the  news  of  the  downfall  of  the  Confederacy  caused  great 
rejoicing  throughout  the  North,  it  had  already  been  discounted  in  a 
business  way  by  the  far-seeing  men  of  the  country,  and  it  had, 
when  finally  announced,  surprisingly  little  efTect  upon  values.  Gold 
did  not  fall  greatly,  although  the  week  was  exciting  and  the  pre- 
cious metal  declined  to  1.44.  It  was  in  the  midst  of  this  month  of 
joy  and  thanksgiving  that  the  news  came  of  the  assassination  of 
President  Lincoln.  It  was  almost  unbelievable  that  after  all  the 
years  of  peril  and  trial  and  anxiety ;  after  the  victory  had  been  won, 
the  red  hand  of  murder  should  strike  down  the  great  man  whom 
Illinois  had  given  to  the  Nation  and  to  the  world. 

No  man  on  the  Board  of  Trade  had  heart  for  business  when 
the  dread  tidings  came.  There  was  no  attempt  to  buy  or  sell,  for  to 
every  man  the  death  of  Lincoln  came  as  a  personal  loss.  The  news 
came  on  Saturday,  April  15.  All  business  was  suspended,  and  again, 
on  Monday,  the  Board  met  only  to  join  in  religious  services  and 
to  listen  to  fervid  words  of  patriotism  and  of  grief.  The  fear  of 
what  might  next  befall  the  nation  was  reflected  in  the  sudden  rise 
of  gold,  the  unfailing  barometer  of  the  time,  to  1.55. 

The  great  President  died  and  the  dear  body  was  brought  home 
to  Illinois.  All  along  the  route  thousands  upon  thousands  watched 
the  funeral  train  on  its  sad  journey,  and  it  was  but  fitting  that  at 
Chicago,  the  metropolis  of  his  home  state,  opportunity  should  be 
given  for  the  people  of  the  West  to  pay  their  homage.  Thus  it  was 
arranged  that  the  cortege  should  stop  for  twenty-four  hours  in 
Chicago  before  the  sad  journey  to  Springfield  was  resumed.  The 
Board  of  Trade  adjourned  from  Saturday  until  Wednesday,  that 


[1865]  OF  THE  CITY  OF  CHICAGO  323 

its  members  might  participate  in  the  arrangements  and  in  the  cere- 
monies held  in  Chicago,  of  which  the  "Commercial  Express"  gives 
the  following  brief  account : 

"The  reception  of  the  remains  of  our  lamented  President  in 
this  city  was  the  occasion  of  a  greater  influx  of  strangers  than  any- 
public  proceeding  here  before.  Competent  judges  estimate  that 
50,000  poured  into  the  city  over  the  various  railroads  during  Satur- 
day, Monday  and  Tuesday.  They  had  but  one  object:  to  partici- 
pate in  tributes  of  respect  for  the  man.  No  business  was  done  on 
Monday  or  Tuesday,  beyond  providing  for  necessities.  Banks, 
stores,  offices  and  exchanges  were  closed.  Processions,  prayers, 
preachings,  dirges,  emblems,  addresses,  all  were  various  voices 
of  the  tide  of  feeling.  The  entree  of  the  corpse  was  signaled  to  the 
thousands  in  waiting  by  the  firing  of  a  gun,  and,  quickly  as  the 
sound  reached  the  court  house,  the  solemn  tolling  of  the  bell  in  its 
cupola  announced  the  arrival  to  the  city.  Thenceforward  the  con- 
tinuous toll  of  the  bell  was  heard  until  the  honored  corpse  reached 
the  court  house." 

The  members  of  the  Board  marched  in  a  body  in  the  gfreat 
funeral  procession,  heading  the  third  division,  with  H.  D.  Booth 
as  marshal,  and  Murry  Nelson,  Redmond  Prindiville  and  J.  Edgar 
Maple  as  aides.  Between  150,000  and  200,000  people  viewed  the 
remains  during  the  stay  in  Chicago.  It  is  a  tribute  to  the  confidence 
which  men  had  in  the  stability  of  the  Union  and  the  perpetuity  of 
Lincoln's  great  work,  that  even  the  great  national  calamity  of  his 
death  did  not  seriously  disarrange  business  and  that,  by  April  27, 
gold  was  going  back  to  the  mark  it  had  reached  after  Lee's  sur- 
render. 

But  the  patriotic  work  of  the  Board  had  not  ended  with  the 
close  of  the  war,  with  the  rejoicing  over  victory  or  with  the  mourn- 
ing over  the  death  of  the  martyred  Lincoln ;  there  remained  in  the 
field  the  three  regiments  and  the  battery  for  which  the  Chicago 
Board  of  Trade  had  stood  sponsor  and  which  represented  not  only 
its  money  and  its  energy,  but  much  of  its  best  young  blood.  All 
these  organizations  had  acquitted  themselves  bravely  and  honor- 
ably upon  the  field  of  battle,  and  the  Board  resolved  that  they 
should  be  welcomed  home  royally,  as  befitted  heroes.  To  this  end 
a  committee,  of  which  Murry  Nelson  was  chairman,  was  appointed 
to  arrange  for  the  home  comings.  The  first  to  return  was  the 
88th  regiment,  in  company  with  the  89th,  a  regiment  raised  by  the 
railroad  men  of  Chicago. 

On  June  13  both  regiments  marched  to  the  Chamber  of  Com- 
merce, where  the  Board  was  in  session  waiting  to  receive  them. 
Chairman  Murry  Nelson  announced  their  presence  and  made  a  brief 
but  eloquent  address  of  welcome.  A  wild  outburst  of  applause 
greeted  the  appearance  of  Sergeant  John  Cheevers,  carrying  the 
flag  of  the  88th,  the  first  flag  to  fly  from  the  heights  of  Mission 
Ridge.    For  the  89th  regiment,  Col.  Chas.  T.  Hotchkiss  responded, 


324  HISTORY  OF  THE  BOARD  OF  TRADE  [1865] 

and  there  were  addresses  by  Gov.  Richard  Oglesby  and  Senator 
Yates.  After  the  joint  reception  the  regiments  separated,  each  to 
be  entertained  and  banqueted  by  the  organization  under  whose 
auspices  it  had  gone  to  the  front.  The  88th  was  entertained  at 
Metropolitan  Hall  by  the  Board  of  Trade  and  the  89th  at  the  Sol- 
diers Rest  by  the  railroad  men. 

Less  than  ten  days  later,  June  22d,  saw  the  return  of  the  113th 
regiment.  This  regiment  did  not  reach  Chicago  until  1  p.  m. ;  too 
late  to  be  received  on  'Change,  but  the  committee  had  prepared 
an  elaborate  banquet  at  Metropolitan  Hall,  to  which  place  the  regi- 
ment marched  under  escort  of  the  reception  committee.  A  most 
sumptuous  feast  was  served  and  this  was  followed  by  addresses 
of  welcome  and  responses. 

Among  the  speakers  were  Murry  Nelson,  President  Charles 
Randolph,  T.  Maple,  J.  C.  Dore,  Rev.  C.  H.  Fowler,  Col.  John 
Hancock  and  others. 

Perhaps  the  warmest  reception  was  that  accorded  the  Board 
of  Trade  battery.  The  homecoming  was  a  great  event  for  all 
Chicago.  The  reception  committee  met  the  returning  veterans  at 
Michigan  City  and  accompanied  them  the  remainder  of  their  jour- 
ney. It  was  three  o'clock  in  the  morning  when  the  boys  of  the 
battery  reached  Chicago,  but  they  found  the  streets  lined  with 
thousands  of  people  who  had  waited  the  night  through  for  their 
coming.  Cannon  boomed,  and  cheers  and  shouts  greeted  them  as 
they  swung  down  the  old  familiar  streets.  The  formal  reception 
was  held  on  'Change  the  following  noon.  The  veterans  marched 
into  the  great  hall,  carrying  proudly  the  battle  flag,  on  which  were 
inscribed  the  names  of  the  engagements  in  which  they  had  borne  a 
valiant  part:  "Stone  River,"  "Elk  River,"  "Chickamauga,"  "Farm- 
ington,"  "Dallas,"  "'Noonday  Creek,"  "Kenesaw  Mountain,"  "At- 
lanta," "Nashville,"  "Salem"  and  "Macon''  were  the  names  em- 
blazoned on  their  flag.  Welcoming  addresses  were  made  by 
President  Randolph  and  Col.  John  L.  Hancock,  and  these  were  re- 
sponded to  by  Capt.  George  I.  Robinson,  Lieutenants  S.  H.  Ste- 
phens and  T.  D.  Griffin,  Sergeants  Durand  and  Adams  and  Privates 
Odell  and  McClellan.  On  motion  of  P.  L.  Underwood,  "All  the 
boys  who  have  honorably  served  in  the  battery"  were  elected  "as 
honorary  members  of  the  Board  of  Trade  of  Chicago,"  The  even- 
ing banquet,  at  Metropolitan  Hall,  is  described  as  being  "lavish, 
brilliant  and  sumptuous  beyond  precedent  in  affairs  of  this  kind." 
The  last  of  the  Board  of  Trade  regiments  to  return  was  the  72nd, 
which  had  been  the  first  to  take  the  field  in  1862.  It  reached  Chi- 
cago on  August  12th,  and  was  also  accorded  a  reception  on  'Change 
and  a  banquet  at  Bryan  Hall,  which  was  on  a  scale  of  magnificence 
equal  to  that  accorded  the  returning  battery.  But  the  Board  did 
not  stop  with  welcoming  the  living,  it  also  honored  the  dead. 
From   southern  battlefields,  wherever  possible,  the  bodies  of  the 


[1865]  OF  THE  CITY  OF  CHICAGO  325 

fallen  members  of  the  battery  were  brought  back  and  consigned  to 
their  last  resting  place  at  Rosehill  cemetery. 

While  answering  every  call  of  patriotism,  the  Board  was  not 
neglectful  of  its  own  affairs.  On  April  17th  it  passed  a  resolution 
changing  the  storage  from  winter  to  summer  receipts,  as  follows : 
"Resolved,  That  all  grain  sold  after  today  be  subject  to  2  cents  stor- 
age, with  receipts  at  least  five  days  to  run,  deliverable  by  11  a.  m. 
the  day  following  the  sale,  unless  otherwise  specified."  Another 
new  development  of  1865  was  the  "night  exchange"  of  produce 
dealers.  This  met  at  the  Masonic  Temple  and  grain  was  sold  on 
call  the  same  as  gold  or  stocks.  After  the  calls  were  over  business 
was  transacted  promiscuously  after  the  manner  of  a  regular  'Change. 
No  more  than  five  minutes  was  allowed  for  each  call.  Early  in  the 
year  1865  the  first  banking  clearing  house  in  Chicago  was  estab 
lished.  It  was  an  experiment,  but  it  proved  satisfactory.  Seven 
teen  banks  participated  and  before  it  had  been  in  operation 
six  weeks  the  clearances  for  a  single  week  were  nearly 
$6,000,000. 

In  May  the  Board  passed  an  important  rule  concerning  mar- 
gins." This  read:  "On  all  time  contracts  made  between  members 
of  this  association  satisfactory  margins  may  be  demanded  by  either 
party,  not  to  exceed  10%  on  the  value  of  the  article  bought  or 
sold  on  the  day  such  margin  is  demanded,  said  margin  to  be  depos- 
ited at  such  place  or  with  such  person  as  may  be  mutually  agreed 
upon.  Such  margin  may  be  demanded  on  or  after  the  date  of 
contract,  and  from  time  to  time,  as  may  be  deemed  necessary  to 
fully  protect  the  party  calling  for  same.  Should  the  party  called 
upon  for  margin,  as  herein  provided,  fail  to  respond  within  twenty- 
four  hours  thereafter,  it  shall  be  optional  with  the  party  making 
such  call  to  consider  the  contract  filled  at  the  market  value  of  the 
article  on  the  day  said  call  is  made,  and  all  differences  between  said 
market  value  and  the  contract  price  shall  be  settled  the  same  as 
though  the  contract  had  fully  expired." 

While  it  was  acknowledged  by  all  thinking  men  that  return 
to  a  specie  basis  was  desirable,  it  was  equally  certain  that  any 
sudden  return  would  so  contract  values  as  to  cause  widespread 
ruin.  It  was  the  problem  of  government  and  of  financiers  to  return 
to  normal  conditions  without  too  great  disturbance  of  business. 
This  was  begun  in  the  following  year  by  the  Funding  Act,  of  April 
12,  1866,  authorizing  the  retirement  of  the  legal  tender  notes  at 
the  rate  of  $4,000,000  per  month ;  but  within  a  few  months  after 
the  passage  of  the  contraction  act,  an  agitation  was  under  way  to 
prevent  any  further  withdrawal  of  notes.  Secretary  McCullough 
felt  compelled,  in  deference  to  unmistakable  public  sentiment,  to 
cease  the  retirement  of  legal  tenders  when  only  $44,000,000  had 
been  withdrawn ;  and  on  the  4th  of  February,  1868,  Congress 
supended  further  reduction  of  the  currency. 


r 


326  HISTORY  OF  THE  BOARD  OF  TRADE  [186SI 

In  May,  1865,  the  Stock  Exchange  occupied  its  new  rooms, 
the  "Gold  Room,"  on  the  third  floor  at  57  Dearborn  Street.  This 
was  made  the  occasion  for  a  banquet  to  which  the  Board  of  Trade 
members  were  invited.  After  the  regular  call  of  the  Board  the 
rules  were  suspended  and  then  "Grain"  was  called  and  the  Board 
of  Trade  members  were  allowed  to  take  part.  Seats  were  sold  but 
in  the  midst  of  the  selling  the  meeting  was  broken  up  by  the  great 
news  that  Jeff  Davis  had  been  captured.  The  routine  work  of  the 
Exchange  was  not  well  established,  and  there  was  much  indignation 
among  the  members  when  it  was  found  that  the  storage  figures  given 
out  by  the  Board  were  highly  inaccurate.  Secretary  Beaty  was 
excused  from  responsibility  as  he  was  sick  at  the  time,  but  the 
members  were  greatly  aggrieved.  With  the  restoration  of  order 
gold  continued  to  fall  and  the  Express  of  May  10  said :  "The  fur- 
ther large  decline  in  gold  has  created  a  panic  in  the  produce  market. 
Grain  sales  are  large  in  amount,  but  at  falling  prices,  but  business 
in  flour  and  provisions  has  been  brought  nearly  to  a  standstill." 
Prices  did  not  contract  as  rapidly  as  did  gold,  however,  and  this 
brought  about  the  usual  newspaper  talk  about  combinations  and 
manipulations  and  the  high  cost  of  living. 

A  sign  of  the  improved  ideals  of  the  time  is  found  in  the  action 
of  the  stocks  yards  magnates  to  suspend  business  on  Sunday.  A 
meeting  was  held,  of  which  Lee  Porter  was  chairman  and  Edwin 
Griffiths  secretary.  The  large  concerns  were  represented  as  fol- 
lows :  S.  W.  Allerton,  Drovers  Union  yards ;  Lee  Porter,  Michigan 
Southern  yards ;  George  Williams,  Sherman  yards ;  E.  H.  Bogart, 
Cottage  Grove  yards;  E.  Erickson,  Pittsburgh  and  Ft.  Wayne 
yards.  The  general  superintendents  of  the  railways  announced, 
after  this  meeting,  that  no  stock  or  freight  trains  would  leave  on 
Sunday  thereafter.  The  Board  of  Trade  was  fast  being  recog- 
nized as  a  great  national  institution,  and  distinguished  visitors  to 
Chicago  were  glad  to  accept  its  hospitality.  On  June  9  the 
victorious  General  Sherman  was  the  guest  on  'Change  and  his 
appearance  was  the  signal  for  business  to  stop.  Again,  on  June 
12th,  General  U.  S.  Grant  was  an  honored  visitor  and  the  business 
of  buying  and  selling  ceased  while  the  enthusiastic  members 
greeted  the  greatest  general  of  the  war. 

In  June  the  Board  was  shocked  by  the  news  of  a  deliberate 
and  well  executed  swindle  upon  many  of  its  leading  members. 
Daggett  &  Whiteside  were  South  Water  street  commission  mer- 
chants and  had  a  good  reputation  as  such  and  this  they  used  to 
great  advantage.  Late  in  the  day  they  bought  large  quantities 
of  grain  from  about  twenty  operators,  giving  their  checks  in  pay- 
ment. They  immediately  sold  the  warehouse  receipts,  securing 
good  checks  for  them,  these  they  cashed  bright  and  early  the  next 
morning  and  then  left  for  parts  unknown.  When  the  checks  given 
by  them  for  the  purchase  of  the  grain  were  presented  they  were 


[1865]  OF  THE  CITY  OF  CHICAGO  327 

found  to  be  worthless.     It  may  well  be  believed  that  this  scandal 
stirred  the  Board  to  its  very  depths. 

Another  matter  which  concerned  the  members  greatly  was  the 
action  of  the  government  in  relation  to  liquors  seized  after  the  dis- 
covery of  frauds  upon  the  internal  revenue.  During  the  war  the 
trade  in  highwines  had  become  an  important  feature  of  the  Ex- 
change and  spirits  held  in  storage  were  as  much  used  as  collateral 
as  any  other  commodity.  Serious  frauds  were  unearthed  and  it 
became  apparent  that  there  had  been  collusion  with  federal  offi- 
cers, for  liquors,  duly  stamped,  were  on  the  market  with  the  reve- 
nue unpaid.  Large  quantities  of  these  liquors  were  thus  seized  in 
the  hands  of  innocent  holders  who  had  advanced  money  on  them 
in  the  ordinary  course  of  business.  So  extensive  were  these  frauds 
that  the  seizure  meant  ruin  to  many  reputable  business  men,  and 
the  entire  trade  in  highwines  was  well-nigh  disrupted.  The  Board 
of  Trade  took  cognizance  of  this  state  of  affairs  in  a  resolution, 
passed  June  15,  1865,  which  was  as  follows : 

"Whereas,  This  Board  is  advised  that  every  effort  is  being 
made  by  informers  and  others  in  their  interest  to  prevent  the 
release  by  the  Government  of  the  highwines  seized  in  the  hands 
of  innocent  holders,  which  bear  the  Government  brand,  showing 
by  that  official  sanction  that  all  duties  thereon  were  paid  and  upon 
which  banks  and  other  citizens  in  the  ordinary  course  of  business 
have  made  advances  without  knowledge  of  fraud  on  the  part  of 
distillers ;  therefore, 

"Resolved,  That  we  do  respectfully  represent  that  an  early 
decision  in  reference  to  the  wines  seized  in  the  hands  of  innocent 
holders  is  needed  by  the  commercial  interests  of  the  West,  and  it 
is  absolutely  essential  to  save  such  innocent  parties  from  financial 
ruin  and  distress,  and  we  in  all  earnestness  ask  that  such  a  decision 
may  at  once  be  made  as  will  protect  all  those  innocent  holders  from 
injury  or  loss  who  have  invested  their  money,  relying  upon  the 
faith  of  the  Government  and  upon  its  brand  and  upon  the  official 
acts  and  assurances  of  its  agents,  who  are  alone  authorized  to 
act  and  give  information  in  the  premises.  And  we  would  further 
represent  that  it  would  seem  to  this  Board  that  to  come  to  any 
other  or  different  decision  would  be  for  the  sake  of  obtaining  a 
revenue,  to  visit  penalties  upon  the  innocent  and  bring  ruin  and 
disaster  to  those  who,  upon  the  faith  and  credit  of  the  Government, 
have  advanced  their  money,  and  that  the  Government  cannot  afford 
for  a  revenue  to  do  such  monstrous  injustice. 

"Resolved,  That  a  copy  of  these  resolutions,  duly  attested, 
be  forwarded  to  Hon.  Hugh  McCulloch,  Secretary  of  the 
Treasury." 

The  justice  of  this  appeal  must  have  been  apparent,  for  the 
liquors  in  question  were  released  and  in  July  a  bonded  warehouse 
was  established  in  Chicago.  This  was  located  on  the  premises  of 
the  Chicago  Dock  Co.,  and  was  hailed  with  delight  by  those  in- 
terested, for  it  was  said,  "Distillers  can  now  send  their  highwines 


J 


/ 


328  HISTORY  OF  THE  BOARD  OF  TRADE  [1865] 

to  store  in  bond,  and  when  there  is  an  actual  demand  for  consump- 
tion, pay  the  duties  and  withdraw  them.  Thus  there  will  be  less 
fraud,  less  risk  and  less  capital  necessary  in  the  business." 

During  the  spring  a  call  had  been  issued  for  a  National  Com- 
mercial Convention  at  Detroit.  This  convention  was  held  in  July. 
Hon.  Hiram  Walbridge  was  president  and  one  of  the  vice  presidents 
was  Hon.  Chas.  Walker  of  Chicago.  According  to  the  reports  this 
convention  was  a  near  riot  on  account  of  the  highhanded  methods 
of  New  York  and  Canadian  delegates,  but  the  Chicago  delegates 
secured  something  like  fairness  and  the  convention  came  to  a  peace- 
ful close.  Among  the  subjects  discussed  were  reciprocity  and  free 
navigation  of  Canadian  waters.  Col.  Bowen  of  Chicago,  as  chair- 
man of  the  committee  on  commerce,  recommended  the  improve- 
ment of  the  Illinois  River  and  the  building  of  the  Niagara  ship 
canal,  the  improvement  of  the  Fox  and  Wisconsin  Rivers,  the  en- 
largement of  the  New  York  canals,  the  cheapening  of  freight  rates 
on  canals  and  an  increase  of  capacity,  an  improved  system  of  sur- 
veys and  soundings,  better  custom  and  lighthouse  provisions,  the 
improvement  of  western  harbors  and  water  and  the  encouragement 
of  steamship  lines  carrying  to  Canada  and  Europe.  Hugh  McLen- 
nan of  Chicago  was  a  member  of  the  Weights  and  Measures  Com- 
mittee, which  recommended  uniformity  of  weights,  and  J.  Y.  Scam- 
mon  was  a  member  of  the  committee  which  recommended  the  es- 
tablishment of  a  National  Board  of  Trade.  Chicago  objected  to 
the  rule  that  a  city  should  have  but  one  vote  in  the  convention,  and 
so  ably  did  it  present  its  arguments  that  it  won  its  point.  ,  During 
the  year  1865  and  succeeding  years  one  of  the  vexed  questions  was 
in  connection  with  the  elevator  service.  It  was  claimed,  and  appar- 
ently with  foundation,  that  there  was  carelessness  in  the  handling 
and  preservation  of  grain,  and  indefensible  methods  of  inspection. 
The  Express  voiced  this  criticism  and  Munn  &  Scott,  elevator  pro- 
prietors, took  the  criticism  personally  and  filed  charges  before  the 
directors  of  the  Board  against  the  editor,  J.  H.  Wells,  who  was  a 
member  of  the  Board.  The  case  was  dismissed,  however,  and  the 
criticism  continued.  The  Tribune  of  July  24  contained  a  letter 
from  a  country  shipper,  as  follows:  "There  are  certain  evils  con- 
nected with  the  present  grain  inspection  of  Chicago  which  demand 
publicity.  Being  a  sufiferer  by  only  one,  and  that  the  most  promi- 
nent one,  qualifies  me  to  speak  intelligently.  By  the  present  system 
of  the  Board  of  Trade  all  spring  wheat  weighing  58  pounds  to  the 
bushel  and  otherwise  in  good  condition,  grades  'Chicago  Extra,' 
and  all  weighing  55  pounds  to  the  bushel  and  otherwise  in  good 
condition  grades  'No.  1.'  Advantage  is  taken  of  the  discretionary 
power  here  conferred  as  to  the  good  or  bad  condition  of  the  wheat 
to  make  capital  of."  The  writer  asks  that  the  Board  take  action 
looking  to  relief  from  these  conditions.  A  letter  signed  by  a  num- 
ber of  shippers  from  Toledo,  Iowa,  also  voiced  a  similar  complaint. 


[186S]  OF  THE  CITY  OF  CHICAGO  329 

These  were  among  the  rumblings  of  the  storm  which  brought  about 
State  inspection  and  control  of  warehousemen. 

The  great  event  in  Board  of  Trade  history  for  the  year  1865 
was  the  opening  of  the  new  Chamber  of  Commerce.  This  was  set 
for  August  30th,  and  elaborate  preparations  were  made.  The  Board 
raised  $25,000  for  the  expense  of  the  ceremonies.  Three  hundred 
invitations  were  issued  to  representatives  of  outside  commercial 
bodies  including  Eastern  cities,  the  British  provinces,  Cincinnati, 
St.  Louis,  Louisville  and  other  cities  of  the  South  and  West.  The 
inaugural  exercises  were  carried  out  with  much  eclat,  but  they  were 
the  occasion  for  bitter  criticism.  A  serious  mistake  was  made  in 
the  treatment  of  the  press.  Western  dealers,  from  whom  Chicago 
secured  the  bulk  of  its  trade,  were  neglected  for  distinguished  vis- 
itors from  the  East  and  the  inaugural  was  the  scene  of  undue  hilar- 
ity. On  the  day  of  the  inaugural  there  was  but  a  brief  session  of 
the  Board  at  its  old  quarters,  from  9  to  10 :30  a.  m.,  and  the  remainder 
of  the  day  was  given  to  the  celebration.  Whatever  may  be  said  of 
the  inaugural  the  move  on  the  part  of  the  Board  of  Trade  was  a 
wise  one.  The  quarters  were  adequate  and  the  investment  made 
in  the  stock  of  the  building  proved  profitable. 

There  was  a  three  days'  program.  The  first  day,  Wednesday, 
witnessed  the  formal  inaugural  ceremonies  in  the  new  hall  and 
this  was  followed  by  a  concert  at  Crosby's  Opera  House  in  the 
evening.  On  Thursday  there  was  a  lake  excursion  on  the  steamer 
"Planet"  and  a  grand  banquet  at  the  Chamber  of  Commerce  in 
the  evening.  On  Friday  the  guests,  escorted  by  the  committee, 
viewed  the  city,  saw  the  great  seven  story  "sky  scrapers"  and  the 
other  sights  and  the  day  concluded  with  a  grand  ball  at  the  Cham- 
ber of  Commerce.  The  columns  of  the  daily  press  were  filled  with 
the  details  of  this  grand  afifair.  It  was  said  to  be  the  most  pro- 
longed and  successful  season  of  festivities  ever  seen  in  the  West. 
At  the  formal  exercises  the  meeting  was  called  to  order  by  President 
Randolph  and  the  representatives  of  the  various  States  who  were 
to  respond  were  called  to  the  platform.  The  ceremonies  were 
opened  by  prayer,  offered  by  Rev.  O.  H.  Tififany.  The  inaugural 
address  was  delivered  by  Mr.  Randolph,  after  which  the  following 
gentlemen  responded  for  the  various  States :  Maine,  S.  T.  Ander- 
son, Portland ;  Massachusetts,  J.  S.  Roper,  Boston ;  Ohio,  W.  T. 
Perkins,  Cincinnati ;  New  York,  D.  G.  Fort,  Oswego ;  Pennsyl- 
vania, J.  B.  Bankson,  Philadelphia;  Michigan,  G.  V.  N.  Lathrop, 
Detroit;  Canada,  Adam  Brown,  Hamilton;  Kentucky,  Judge  Hab- 
bison,  Louisville;  Missouri,  M.  Abel,  St.  Louis;  Indiana,  E.  B. 
Martindale,  Indianapolis ;  Louisiana,  John  W.  Norris,  New  Or- 
leans ;  Tennessee,  A.  J.  Smith,  Memphis ;  New  York,  A.  L.  Pease, 
Troy. 

The  following  is  a  description  of  the  building,  as  published 
at  the  time :     "It  is  of  cut  stone  (Athens  marble)  on  three  sides. 


^ 


330  HISTORY  OF  THE  BOARD  OF  TRADE  [1865] 

fronting  north,  east  and  west,  and  brick  on  the  south  side,  fronting 
Calhoun  Place.  The  facade  on  Washington  street  has  a  frontage 
of  93  feet  and  the  depth,  on  La  Salle  street  and  Exchange  Place  is 
180  feet.  The  main  entrance  on  Washington  street  opens  on  a 
corridor  on  the  ground  floor,  16  feet  in  width,  running  through 
the  building  north  and  south,  from  which  open,  on  either  side, 
entrances  to  various  offices  which  occupy  the  first  story.  Beneath 
the  ground  floor  is  a  high  and  well  ventilated  basement,  also  fitted 
up  for  offices,  with  street  entrances  on  the  sides  of  the  building. 
The  facade  above  the  first  story  is  divided  into  three  parts  by  large 
quoins  projecting  boldly  from  the  wall  line.  The  middle  space 
is  a  circular-topped  triple  window  of  plate  glass  30  feet  high  and 
12  feet  wide,  with  architraves  and  an  ornamental  keystone.  The 
side  spaces  have  each  two  windows  similar  in  style  of  ornamenta- 
tion but  of  smaller  dimensions.  There  are  also  side  entrances  to 
the  building  from  La  Salle  street  and  Exchange  Place,  which  lead 
to  the  main  corridor  and  to  the  stairways  of  the  second  story.  The 
whole  building  is  surmounted  by  a  Mansard  roof,  the  extreme  height 
of  which  is  23  feet  above  the  cornice  and  99  feet  from  the  basement 
floor.  The  design  is  not  strictly  in  accord  with  any  known  style 
of  architecture,  the  esthetic  element  in  art  being  kept  in  subservi- 
ence to  the  practical  uses  for  which  the  building  was  planned,  and 
restricted  by  the  economic  limitations  to  the  cost  of  the  proposed 
structure. 

"It  is,  however,  with  one  exception,  the  most  pretentious  and 
substantial  edifice  in  the  city,  and  although  severely  plain  in  its 
outward  adornments,  is  symmetrical  in  its  proportions,  massive  in 
style,  and  an  ornament  to  the  growing  city.  The  quarters  of  the 
Board  of  Trade  are  in  the  second  story,  which  is  reached  by  two 
iron  stairways,  5  feet  wide  at  the  north  end  and  another,  seven 
feet  wide,  at  the  south  end  of  the  building.  The  hall  is  143  feet 
long,  87  feet  wide  and  45  feet  from  floor  to  ceiling.  The  President's 
seat  is  in  the  center  of  a  dais  at  the  north  end  of  the  hall,  and  across 
the  south  end  is  a  gallery  or  balcony  from  which  spectators  look 
down  upon  the  throng  below  and  from  which  the  Secretary  is  wont 
to  proclaim  the  markets  and  to  make  his  other  official  announce- 
ments. The  hall  is  well  lighted  by  ten  windows  on  either  side  and 
five  at  the  north  end.  The  walls  and  ceiling  are  adorned  with  fres- 
coes in  designs  illustrative  of  the  various  departments  of  industry, 
agriculture,  manufacture,  commerce,  etc.  The  edifice  is  heated 
by  steam  and  at  evening  sessions  illuminated  by  ten  large  reflec- 
tors from  the  ceiling.  The  total  cost  of  the  building,  including 
the  lot,  is  not  far  from  $490,000."  The  rental  paid  by  the  Board  was 
$20,000  and  the  receipts  from  other  offices  in  the  building  nearly 
$30,000  per  annum.  The  new  Exchange  hall  was  occupied  by  the 
Board  of  Trade  for  the  transaction  of  business  on  the  5th  of  Sep- 
tember, 1865. 


[1865]  OF  THE  CITY  OF  CHICAGO  331 

On  the  evening  of  October  13,  1865,  a  special  meeting  of  the 
Board  of  Trade  was  held  for  the  purpose  of  adopting  a  new  system 
of  General  Rules  and  By-Laws.  After  President  Randolph  had 
called  the  meeting  to  order  the  following  preamble,  setting  forth 
the  purposes  for  which  the  organization  was  formed,  was  read : 
"Having  a  desire  to  advance  the  commercial  character  and  pro- 
mote the  manufacturing  interests  of  Chicago  and  wishing  to  incul- 
cate just  and  equitable  principles  in  trade,  establish  and  maintain 
uniformity  in  the  commercial  usages  of  the  city,  acquire,  preserve 
and  disseminate  valuable  business  information,  and  with  the  view 
to  avoid  and  adjust  as  far  as  practicable  the  controversies  and  mis- 
understandings which  are  apt  to  arise  between  individuals  engaged 
in  trade  when  they  have  no  acknowledged  rules  to  guide  them,  we, 
the  members  of  the  Board  of  Trade  of  the  City  of  Chicago,  by  virtue 
of  the  power  vested  in  us  by  the  preceding  charter,  do  hereby  agree 
to  be  governed  by  the  following  rules  and  by-laws."  The  rules 
were  then  taken  up  and  discussed  one  by  one.  Dealing  in  futures 
was  recognized  under  Rule  IX  which  provided  for  the  putting  up 
of  margins  on  time  contracts.  Under  Rule  X,  which  dealt  with  fail- 
ure to  deliver  upon  contracts  and  under  Rule  XI,  which  defined 
rights  of  parties  on  time  contracts.  These  rules,  which  were  duly 
accepted,  ran  as  follows : 

"Rule  IX.  On  all  time  contracts  made  between  members  of 
the  Association  satisfactory  margins  may  be  demanded  by  either 
party  not  to  exceed  ten  (10)  per  cent  on  the  value  of  the  property 
bought  or  sold  on  the  day  such  margin  is  demanded,  said  margin 
to  be  deposited  with  the  Treasurer  of  the  Association  unless  other- 
wise agreed  upon.  Said  margin  may  be  demanded  on  or  after  the 
day  of  contract  and  from  time  to  time  as  may  be  deemed  necessary 
to  fully  protect  the  party  calling  for  same.  Should  the  party  called 
upon  for  margin,  as  herein  provided  for,  fail  to  respond  within  the 
next  three  banking  hours,  it  shall  thereupon  be  optional  with  the 
party  making  such  call,  by  giving  notice  to  the  delinquent,  to  con- 
sider the  contract  filled  at  the  market  price  of  the  article,  at  the 
time  of  giving  such  notice ;  and  all  differences  between  said  market 
value  and  the  contract  price  shall  be  settled  the  same  as  though 
the  time  of  said  contract  had  fully  expired. 

"Rule  X.  'Failure  to  Deliver  on  Contracts.'  In  case  any  prop- 
erty contracted  for  future  delivery  is  not  delivered  on  the  day  of 
maturity  of  such  contract,  the  value  of  such  property  shall  be  de- 
termined by  the  average  market  price  of  the  next  business  day. 

"Rule  XL  'Rights  of  Parties  on  Time  Contracts.'  On  time 
contracts  made  between  members  of  the  Association  where  grain 
is  bought  at  buyer's  option,  the  time  of  delivery  shall  be  as  follows : 
When  the  call  is  made  by  the  buyer  before  twelve  o'clock  M.,  the 
property  shall  be  due  and  deliverable  before  4  o'clock  p.  m.  the 
same  day.  When  the  call  is  made  after  12  o'clock  M.,  the  property 
shall  be  due  and  deliverable  before  11  o'clock  a.  m.  the  next  day. 
Or  the  buyer  may  specify  any  particular  future  day  during  the  term 


332 


HISTORY  OF  THE  BOARD  OF  TRADE 


[1865] 


L 


.\ 


\^ 


of  the  option  upon  which  the  property  shall  be  due  and  deliverable. 
On  contracts  for  grain  at  seller's  option  the  seller  may  deliver  the 
property  at  any  time  during  the  option  between  the  hours  of  9  a.  m. 
and  3  p.  m.,  but  failing  to  find  the  purchaser  on  call  to  deliver,  notice 
shall  be  left  at  his  place  of  business,  and  the  buyer  shall  be  entitled 
to  call  for  the  property  within  the  next  two  business  hours." 

What  are  known  as  "puts"  and  "calls"  were  discountenanced 
by  the  closing  paragraph  of  Rule  XI,  which  ran  as  follows :  "Privi- 
leges bought  or  sold  to  deliver  or  call  for  grain  or  other  property 
by  members  of  the  Association  shall  not  be  recognized  as  a  business 
transaction  by  the  Directors  or  Committee  of  Arbitration."  Deal- 
ing in  these  privileges,  however,  though  not  recognized,  does  not 
appear  to  have  been  forbidden.  In  formally  adopting  the  principle 
of  trading  in  "futures,"  the  Association  had  taken  a  new  stand.  In 
acting  thus  it  did  the  right  thing,  for  a  square  issue  was  involved, 
and  such  issues  should  be  faced  and  not  evaded.  For  at  least  ten 
years,  as  has  been  shown,  a  large  business  in  futures  had  been 
transacted  by  members  of  the  Board  of  Trade,  and  during  the  war 
this  business  had  grown  to  immense  proportions,  at  times  estab- 
lishing values  of  grain  and  provisions  throughout  the  civilized 
world.  But  until  the  adoption  of  these  rules  defining  the  rights 
of  parties  under  contracts  for  future  delivery,  the  Board  had  no 
adequate  machinery  for  the  adjustment  of  the  disputes  which  were 
constantly   arising. 

That  Chicago  was  not  purely  selfish  and  that  it  was  awake  to 
the  fact  that  whatever  developed  any  part  of  the  West  was  to  its 
advantage  is  shown  by  the  active  interest  taken  in  the  project  to 
improve  the  harbor  at  Michigan  City.  To  promote  this  a  conven- 
tion was  called  at  Michigan  City  and  the  Board  of  Trade  was  rep- 
resented by  an  able  committee.  It  was  also  very  natural  that  the 
members  of  the  Board  of  Trade  should  take  a  deep  interest  in  the 
laying  of  the  Atlantic  cable,  for  it  meant  very  much  to  them  in 
bringing  the  news  of  foreign  markets.  The  attempt  to  lay  the 
cable  was  made  in  August  of  this  year,  but  in  mid-ocean  the  cable 
parted  and  it  was  not  until  1866  that  the  cable  was  completed  and 
the  first  message  was  celebrated  by  the  firing  of  guns  both  at 
Chicago  and  New  York.  At  first,  however,  there  were  difficulties 
on  the  American  side  and  it  required  three  days  for  a  message  to 
be  received  from  London.  Even  this  was  a  great  boon  to  the 
Board  of  Trade  and  in  a  short  time  after  the  cable  was  laid  tele- 
graphic communication  was  established  to  Hearts  Content  and  the 
three  days  were  cut  to  three  hours. 

In  November  the  Board  had  a  conflict  with  the  elevator  men. 
It  was  announced  that  the  elevators  would  charge  30  cents  per 
bushel  to  April  15  on  all  grain  stored  before  Nov.  1st,  much  of 
which  they  claimed  was  out  of  condition.  At  a  conference  between 
a  committee  of  the  Board  of  Trade  and  the  elevator  men  the  latter 


[1865]  OF  THE  CITY  OF  CHICAGO  333 

at  first  proposed  to  defer  action  until  Dec.  1st,  but  later  refused  this 
concession  and  declined  further  conference  with  the  committee.  A 
special  meeting  of  the  Board  was  held  on  Saturday  evening,  Novem- 
ber 11th,  to  consider  the  issue  raised  by  the  warehousemen,  at 
which  the  whole  matter  was  referred  to  the  directors.  The  elevator  , 
men  finally  agreed  to  defer  the  extra  storage  charge  until  Decem-  ' 
ber  1st,  providing  grain  was  removed  before  that  time;  but  their 
arbitrary  action  increased  the  resentment  felt  by  many  members 
of  the  Board  of  Trade,  and  furnished  a  strong  argument  in  favor 
of  state  control  of  inspection  and  warehousing  of  grain. 

As  a  sidelight  on  the  affairs  of  the  Board  at  this  period  nothing, 
perhaps,  could  be  more  illuminating  than  the  following  resolution 
passed  by  the  Board  in  July,  1865 :  "Resolved,  That  we  hereby 
express  our  unqualified  disapprobation  of  the  practices  indulged 
in  by  certain  members  of  the  Board  while  assembled  on  'Change, 
of  scuffling,  pushing,  and  throwing  grain,  flour,  and  other  articles 
about  the  room  and  on  persons  engaged  in  the  transaction  of  busi-  ^ 
ness,  and  that  in  future  such  transactions  in  the  hall,  while  the 
Board  is  in  session,  shall  be  deemed  sufficient  cause  for  summary 
suspension  from  the  privileges  of  the  Board  of  Trade." 

After  the  terrific  decline  in  the  early  part  of  the  year  caused  by 
the  deflation  in  the  price  of  gold,  the  wheat  market  showed  no 
unusual  features.  Times  were  good,  money  was  comparatively 
easy,  the  radius  of  Chicago's  trade  territory  was  increasing  with 
each  month  as  the  tentacles  of  ties  and  rails  were  extended  over 
the  prairies  and  the  plains,  with  the  mountains  and  the  far  Pacific 
for  their  goal.  In  May  it  was  reported  that  the  high  water  had 
released  much  grain  which  had  been  held  back  on  the  Upper  Miss- 
issippi River  on  account  of  the  low  water  of  preceding  years.  This 
depressed  prices  temporarily,  but  by  the  end  of  the  month  the 
market  was  buoyant  as  freight  rates  had  been  reduced  and  reports 
of  the  growing  crops  were  less  favorable.  This  rising  market  con- 
tinued into  June,  but  the  advance  was  short  lived,  and  prices  soon 
declined  from  15  to  20  cents  per  bushel.  In  the  latter  part  of  July 
two  weeks  of  rain  caused  an  excited  advance  of  about  30  cents  per 
bushel,  one-half  of  which  was  lost  in  three  or  four  days  when  the 
skies  cleared  and  the  rain  ceased.  There  was  something  approach- 
ing a  "corner"  in  September.  On  Friday,  the  15th,  the  price  of 
wheat  was  forced  up  to  $1.54@1.55  and  by  the  following  Wednes- 
day it  had  receded  to  $1.41@1.42.  In  October  the  trade  was  in- 
formed by  warehousemen  that  oats,  rye  and  barley  in  store  were 
heating  badly  on  account  of  unfavorable  weather  conditions.  There 
was  much  indignation  expressed  that  no  efforts  were  made  to  save 
this  grain  and  there  was  talk  of  the  necessity  for  state  supervision, 
as  already  stated. 

There  was  one  notable  death  during  the  year,  that  of  John 
H.  Kinzie,  who  died  June  19  on  the  cars  near  Pittsburgh.     He  was 


334  HISTORY  OF  THE  BOARD  OF  TRADE  [1865J 

one  of  the  pioneers  of  Chicago,  having  been  brought  to  this  place 
by  his  parents  in  1804,  when  he  was  about  a  year  old. 

An  idea  of  the  volume  of  business  in  1865  is  drawn  from  the 
figures  published  in  the  Express.  It  was  said  that  commission 
houses  did  an  annual  business  of  from  $50,000  to  $500,000,  while 
some  few  did  a  business  of  from  $600,000  to  $1,000,000.  Whole- 
salers did  a  business  of  from  $200,000  to  $2,000,000,  packers  from 
$1,000,000  to  $2,000,000,  manufacturers  from  $50,000  to  $500,000, 
and  the  Farwell  Company  was  credited  with  a  business  of  $5,464,- 
000.  The  census  of  1865  gave  the  population  of  the  city  as  178,900 
and  there  were  106  churches,  18  public  schools,  7  select  schools,  48 
newspapers  and  periodicals  and  13  national  banks.  In  July,  1865, 
the  Commercial  Express  published  a  list  of  the  incomes  of  Chi- 
cago's wealthiest  men,  as  follows :  William  B.  Ogden,  railroad 
king,  $388,455;  S.  M.  Nickerson,  the  distiller,  $275,643;  C.  H. 
McCormick,  the  reaper  man,  $191,000;  J.  V.  Farwell,  dry  goods, 
$154,000;  U.  H.  Crosby,  owner  opera  house,  $194,000;  E.  W. 
Blatchford,  lead  works.  $108,000.  Some  half  dozen  others  report 
incomes  of  nearly  $100,000,  but  the  majority  of  those  termed 
successful  business  men  are  returned  at  from  $15,000  to 
$50,000. 

It  was  in  the  year  1865  that  railroad  connections  were  estab- 
lished with  the  Lake  Superior  region,  the  Northwestern  Railway 
pushing  its  line  through  to  Marquette.  Thus  was  added  another 
rich  field  to  Chicago's  trade  territory.  The  time  for  freight  ship- 
ments to  Marquette  was  46  hours,  by  rail,  and  there  was  a  weekly 
line  of  propellers  in  the  following  year. 

Another  highly  important  accomplishment  of  the  year  1865 
was  the  institution  of  the  Union  Stock  Yards.  Prior  to  this  time 
there  had  been  various  yards  scattered  about  the  city,  making  the 
expense  of  handling  great,  causing  much  inconvenience  to  shippers 
and  limiting  the  market.  Among  these  were  the  old  "Bull's  Head" 
market,  Madison  and  Ogden,  established  in  1848 ;  the  Michigan 
Southern  yards,  corner  State  and  Twenty-second  streets,  estab- 
^'V  lished  as  early  as  1854  and  enlarged  in  1857;  the  Myrick  "Lake 
Shore"  or  "Sherman"  yards,  on  Cottage  Grove  avenue,  established 
by  John  B.  Sherman  in  1856;  the  Fort  Wayne  yards,  corner  of 
Stewart  avenue  and  Mitchell  street,  and  the  C.  F.  Loomis  &  Co. 
yards  on  Cottage  Grove  avenue.  Later  the  C,  B.  &  Q.  Railway, 
together  with  J.  C.  Dore  and  others,  opened  yards  some  two  miles 
west  of  the  city,  but  this  project  proved  a  failure  and  only  accen- 
tuated the  fact  that  a  union  yard  was  necessary.  The  company 
was  organized  in  1864  with  a  capital  of  $1,000,000,  all  but  $75,000 
of  which  was  subscribed  by  the  leading  railroads  coming  into  Chi- 
cago. A  charter  was  granted  February  13,  1865,  and  the  organ- 
ization completed.  T.  B.  Blackstone  was  the  first  president,  F. 
H.  Winston  secretary  and  Robert  Nolton  assistant  secretary.    The 


.^ 


[1865]  OF  THE  CITY  OF  CHICAGO  335 

incorporators,  many  of  whom  were  prominent  on  the  Board  of 
Trade,  were  John  L.  Hancock,  R.  M.  Hough,  V.  A.  Turpin,  S.  A. 
Kent,  Lyman  Blair,  C.  M.  Culbertson,  G.  W.  Cass,  M.  L.  Sykes  Jr., 
J.  F.  Joy,  J.  F.  Tracy,  T.  B.  Blackstone,  J.  H.  Moore,  J.  S.  Barry,  H. 
E.  Sargent,  B.  C.  Cook,  J.  B.  Drake,  W.  D.  Judson,  David  Kreigh 
and  J.  B.  Sherman.  Three  hundred  and  twenty  acres  were  bought 
in  the  town  of  Lake,  on  Halsted  street,  of  Hon.  John  Wentworth, 
for  the  sum  of  $100,000.  The  land  was  a  marsh,  by  many  consid- 
ered impossible  of  drainage,  but  this  was  accomplished,  and  the 
yards  were  opened  in  December,  1865.  About  one  hundred  acres 
were  used  for  pens,  and  these  had  board  floors.  There  were  fifteen 
hundred  open  pens,  and  eight  hundred  covered  pens,  but  these 
were  increased  in  number  and  extent  as  the  business  of  Chicago 
grew.  These  union  yards  were  a  success  from  the  start  and 
proved  of  great  value  to  the  Chicago  market.  All  the  railroads 
ran  switches  to  the  yards,  and,  during  1866,  a  complete  system  of 
waterworks  was  installed,  and  artesian  wells  were  sunk  to  obtain 
pure  water  for  the  stock.  The  first  of  these  wells  was  1,030  feet 
deep,  and  the  average  depth  of  those  which  have  been  bored  sub- 
sequently is  more  than  1,300  feet. 

Tables  giving  prices  at  semi-monthly  periods  of  flour,  wheat, 
corn  and  oats  for  the  years  1865-1871,  inclusive,  are  given  to- 
gether, for  comparison,  on  a  later  page,  but  a  brief  market  review 
of  the  year  1865  is  given  herewith.  An  idea  of  the  market  range 
will  be  gleaned  from  the  following  figures.  On  January  4  No.  1 
spring  wheat  was  $1.74,  and  this  was  the  highest  point  reached 
during  the  year.  By  the  close  of  January  it  had  gone  down  to  $1.44; 
there  was  a  temporary  rally  during  the  early  part  of  February 
which  was  lost  before  the  1st  of  March.  A  further  decline  fol- 
lowed, and,  on  March  29,  it  was  held  at  $1.14.  The  price  dipped 
to  98  cents  on  April  3,  when  Richmond  was  taken,  but  rallied  to 
$1.21  by  the  end  of  the  month.  Another  low  mark  was  reached 
in  July  when,  on  the  Sth,  it  touched  $1.00J^.  The  price  rose 
throughout  the  latter  part  of  July,  reached  $1.44  in  August,  and 
culminated,  September  15,  when,  through  the  influence  of  a  corner, 
it  rose  to  $1.55.  By  the  19th  of  September  the  price  had  broken 
to  $1.37,  and  this  decline  lasted  until,  after  another  advance  to 
$1.53^,  October  31,  $1.16  was  reached  on  the  Sth  of  December. 
The  last  day  of  the  year  No.  1  spring  wheat  closed  at  $1.30. 

Corn  had  an  erratic  course.  It  began  the  year  at  80@82  cents 
for  "rejected"  corn,  the  first  quotation  for  No.  2  corn  being  88  cents 
January  S.  It  fell  slowly  until  April  3,  when  "rejected"  corn  reached 
50  cents,  and  No.  1  corn  sold  at  57  cents.  A  sharp  rally  carried  it 
up  to  72  cents  by  April  26,  but  it  sagged  again,  touching  49  cents 
on  May  17  for  No.  1  corn.  At  the  close  of  May  it  had  gone  up 
a  few  cents,  remaining  under  60c  until  July.  The  price  ranged  from 
53@75  cents  in  July  and  was  as  high  as  73  cents  in  August.     In 


336  HISTORY  OF  THE  BOARD  OF  TRADE  [1865] 

October  there  was  another  fall  to  43  cents  and  the  close  of  the  year 
found  it  under  50  cents. 

Oats  likewise  started  high,  at  67^  cents  for  No.  1,  but  on 
April  3  it  touched  34^  cents  on  receipt  of  the  news  that  Richmond 
had  been  captured.  Fifty-eight  cents  reached  in  June  was  the 
highest  point  thereafter,  and  with  but  gradual  fluctuations  it  closed 
the  year  at  26  cents,  showing  a  decline  of  more  than  50  per  cent 
during  the  year. 

Rye  was  $1.12  for  No.  1  on  January  4,  declined  to  $1  before 
the  end  of  the  month,  and  fell  rapidly  in  March.  By  the  25th 
of  April  it  had  rallied  to  81  cents,  but  this  was  followed  by  a 
sudden  drop,  and,  on  May  13,  it  touched  52  cents.  It  reached  62J/2 
cents  May  22,  69  cents  July  18,  and  in  August  advanced  to  91 
cents  on  the  28th.  Before  the  end  of  September  it  was  under  70 
cents,  but  it  lost  strength  and  sold  as  low  as  45  cents  early  in 
December  and  the  year  closed  at  55  cents. 

Barley  was  high  but  almost  too  dull  to  quote  at  the  opening 
of  the  year.  January  25  the  price  was  $1.30  for  No.  2,  and  re- 
mained above  $1  till  March ;  reached  80  cents  in  April,  and  by 
May  19  was  down  to  50  cents.  A  high  price  of  $1.15  was  regis- 
tered July  28,  but  on  the  18th  of  August  it  was  down  to  75  cents. 
In  September  its  course  was  erratic,  but  in  October  it  reached 
40  cents,  and  this  was  also  the  quotation  on  December  28. 

At  the  beginning  of  the  year  1865  live  hogs  were  $10@12.50, 
and  there  was  little  change  until  the  latter  part  of  March,  when 
a  decline  began  which  was  not  checked  until  the  low  point  for  the 
year  was  reached  about  the  first  of  June  at  $6.50@8.25.  It  was 
not  until  July  that  choice  hogs  again  reached  $9  but  from  that 
time  on  the  price  rose  gradually,  reaching  $12@13.25  about  the 
first  of  October.  There  was  a  sharp  break  the  latter  part  of  Novem- 
ber, and  prices  for  the  remainder  of  1865  ranged  from  $8.50@9  to 
$9@9.90.  The  total  receipts  and  shipments  of  hogs  for  the  year 
1865-6,  according  to  the  annual  report  of  the  Secretary  of  the  Board 
of  Trade,  compared  with  the  previous  years,  were  as  follows : 

Receipts  Shipments 

1864-5 1,410,320  536,437 

1865-6 1,178,832  663,566 

The  number  of  hogs  packed  was  507,355  against  760,514  the 
previous  year. 

Receipts  and  shipments  of  the  leading  cereals  for  the  statis- 
tical year  April  1,  1865,  to  March  31,  1866,  according  to  the  Sec- 
retary's report,  were  as  follows : 

Receipts  Shipments 

Wheat   bushels    9,242,108  8,098,968 

Corn   "        26,100,319  25,228,526 


[1865]  OF  THE  CITY  OF  CHICAGO  337 

Receipts  Shipments 

Oats "        10,393,936  10,598,061 

Rye   "           1,169,180  1,022,200 

Barley   "           1,667,868  645,089 

Concerning  the  provision  market  for  1865,  the  Secretary  stated, 
in  his  report :  "Notwithstanding  the  adverse  circumstances  which 
have  prevailed  to  depress  the  markets,  the  provision  trade  of  Chi- 
cago during  the  past  year  has  been  moderately  active.  On  the 
one  hand  operators  have  had  to  contend  with  the  heavy  decline 
in  gold,  which  rendered  the  markets  irregular  and  unsatisfactory, 
and,  on  the  other  hand  they  had  a  heavy  falling  off  in  the  hog  crop, 
which  caused  a  great  firmness  in  the  price  of  hogs  without  cor- 
responding strength  in  the  market  for  product.  Under  these  cir- 
cumstances our  provision  dealers  and  packers  operated  cautiously, 
and  the  trade  of  the  past  year,  as  compared  with  former  seasons, 
shows  a  falling  off;  but  it  is  satisfactory  to  note  that  Chicago  still 
holds  pre-eminence  as  the  greatest  provision  mart  of  the  West, 
and  of  the  United  States.  Happily  our  provision  trade  is  not  con- 
fined to  one  branch,  but  embraces  the  beef  and  pork  packing  and 
the  extensive  traffic  in  beeves  and  hogs  with  the  Eastern  states. 
The  latter,  during  the  past  two  or  three  years,  has  become  enor- 
mous, as  a  proof  of  which  it  is  only  necessary  to  state  that  since 
the  date  of  our  last  yearly  review  the  great  Union  Stock  Yards 
have  been  constructed  and  established,  embracing  about  300  acres 
of  land,  with  yards  and  pens  fitted  up  to  accommodate  10,000  head 
of  beef  cattle  and  100,000  hogs.  The  capital  expended  in  this  en- 
terprise alone  amounts  to  $1,400,000.  For  many  years  past  Chi- 
cago has  had  the  largest  cattle  market  in  the  United  States,  and 
now  it  can  boast  of  having  the  best  appointed,  most  extensive  and 
most  comfortable  yards  in  the  world." 

The  receipts  and  shipments  of  cattle  for  1865-66,  compared 
with  1864-65,  were  as  follows:  Receipts,  348,928;  shipments,  310,- 
444.  In  1864-65  receipts  were  343,726  and  shipments  262,446.  The 
Secretary,  in  his  report,  states :  Shipments  during  the  last  year 
show  a  much  larger  increase  than  the  receipts.  This  is  to  be  ac- 
counted for  by  the  fact  that  during  the  summer  and  fall  of  1865 
immense  herds  of  beef  cattle  were  driven  into  Chicago  on  foot 
across  the  prairies  for  the  purpose  of  saving  the  high  rates  of 
freight  charged  by  the  railroads. 

Lake  transportation  for  1865  opened  late  in  April.  The  open- 
ing rate  on  corn,  per  bushel,  to  Buffalo  was  11  cents.  Before  the 
end  of  May  it  had  declined  to  4@4j/2  cents.  During  the  midsum- 
mer months  the  rate  was  from  4J/  to  8j4  cents.  All  rail  and  lake 
and  rail  freights  showed  much  variation  during  the  year.  The 
cost  of  transporting  a  barrel  of  flour  to  New  York  by  rail  was 
as  follows:  April,  $1.90;  May,  $1.40;  June,  $1.30;  July,  $l@80c; 
August,  90c  to  $1;  Sept.,  $1.25  to  $1.40;  Oct.,  $1.45  to  $1.60;  Nov., 
$1.80  to  $2.20;  Dec,  $2.45.    By  lake  and  rail  the  rates  on  flour  to 


338  HISTORY  OF  THE  BOARD  OF  TRADE  [1865] 

New  York  were:  April,  $1.60;  May,  $1.30  to  80c;  June,  80c  to  70c; 
July,  75c  to  85c;  Aug.,  85c  to  80c;  Sept.,  85c  to  $1.25;  Oct.,  $1.35 
to  $1.65;  Nov.,  $1.85  to  $2. 

The  packing  season  which  closed  in  March,  1866,  showed  a 
large  decrease  in  the  number  of  hogs  packed.  This  decrease  ex- 
tended throughout  the  country,  but  the  increase  in  average  weight 
reduced  the  shortage  in  product  to  about  18  per  cent  as  compared 
with  the  previous  season.  The  following  statistics  copied  in  the 
Express  of  March  28,  1866,  from  the  Cincinnati  Price  Current  show 
the  wide  diffusion  of  packing  interests  and  that,  although  Chicago 
was  growing  as  a  packing  center,  the  industry  was  not  yet  concen- 
trated at  a  few  points  as  in  later  years.    The  figures  follow : 

Total  Hogs  Packed 

n/                                                                                     1864-5  1865-6 

57  cities  in  Ohio    507,136  459,390 

4  cities  in  Kentucky    118,267  92,719 

45  cities  in  Illinois    1,001,426  622,047 

55  cities  in  Indiana    260,401  168,550 

20  cities  in  Iowa   176,807  76,011 

3  cities  in  Wisconsin   121,128  99,547 

13  cities  in  Missouri    266,454  165,210 

Total 2,451,619        1,683,474 

Deficiency,  768,145 

Of  these  Cincinnati  packed  350,600  in  1864-5  and  354,079  in 
1865-6,  and  Chicago  packed  760,514  in  1864-5  and  507,355  in  1865-6, 
as  before  stated.  Having  once  established  its  predominance  as  a 
packing  center,  Chicago  has  never  been  surpassed  in  this  respect 
by  any  other  city. 


CHAPTER  VI 

From  the  Close  of  the  War  to  the  Great  Fire  in  1871 

1866 

FOLLOWING  the  usual  closeness  of  the  money  market  at  the 
end  of  the  year,  money  became  easy  early  in  1866.  During  the 
post-bellum  years,  \0%  was  the  prevailing  interest  rate  and  it  often 
mounted  much  higher.  There  were  frequent  times  of  stringency 
when  money  could  only  be  obtained  from  curb  brokers  at  Ij^,  2  and 
sometimes  2%  a.  month.  Gold,  January  25,  1866,  was  quoted  at 
139^  and  other  quotations,  showing  the  range,  were,  March  24, 
USyi ;  June  5,  146>^  ;  June  18,  168;  and  December  31,  133^-  The 
Board  election  campaign  for  the  year  1866  was  a  matter  of  great 
interest  to  the  members.  There  was  opposition  to  the  re-election 
of  Charles  Randolph  as  president  and  much  criticism  of  his  admin- 
istration. T.  Maple  was  urged  as  a  candidate  and,  upon  his  re- 
fusal, John  C.  Dore  was  brought  out  as  the  anti-administration 
candidate.  Just  prior  to  the  election  Randolph  withdrew  and  the 
administration  vote  went  to  R.  McChesney,  with  the  result  that 
Mr.  Dore  was  elected.  {The  Corilmercial  Express,  while  a  reliable 
market  paper,  was  partisan  both  as  to  general  politics  and  as  to 
the  politics  of  the  Board  of  Trade.  It  had  a  grievance  against 
President  Randolph  for  his  action  relative  to  charges  brought 
against  the  Express  by  Munn  and  Scott  and  its  pre-election  utter- 
ances, which  were  bitter,  must  be  taken  with  due  allowance. 

The  last  act  of  the  old  board  of  directors  was  to  increase  the 
rates  for  inspection.  The  new  rates  were  as  follows :  Inspection 
into  store,  one  car,  25  cents;  inspection  on  board  vessels,  per  1,000 
bushels,  50  cents;  from  canal,  per  boat  load,  $1.25;  from  store  into 
car,  per  car,  50  cents.  These  increases  caused  much  dissatisfac- 
tion and  were  bitterly  attacked  by  the  newspapers  of  the  city,  the 
Times,  Journal  and  Republican  strongly  opposing  them.  The  finan- 
cial report  also  showed  a  deficit,  although  the  preceding  year  the 
dues  had  been  raised  from  $10  to  $25.  That  the  amount  of  the  deficit, 
$4,406.48,  so  nearly  corresponded  with  the  deficit  for  the  inaugural 
ceremonies,  $4,241.45,  was  also  a  matter  for  criticism.  The  result 
of  the  election,  held  April  2,  1866,  was  as  follows :  President, 
John  C.  Dore;  First  Vice-President,  P.  L.  Underwood;  Second 
Vice-President,  E.  W.  Densmore;  Directors,  Henry  Botsford,  J. 
H.  Dole,  H.  A.  Towner,  T.  H.  Seymour  and  J.  W.  Pottle.  A  com- 
mittee of  twenty-one,  to  be  called  the  Commercial  Committee,  and 
to  have  charge  of  matters  of  general  interest  for  the  welfare  of 

339 


340  HISTORY  OF  THE  BOARD  OF  TRADE  [1866] 

the  city,  was  authorized  at  the  Board  meeting  and  the  following 
were  later  appointed:  S.  Clement,  P.  W.  Gates,  J.  H.  Bowen,  H. 
G.  Powers,  Geo.  Armour,  John  M.  Douglass,  T.  M.  Avery,  John 
L.  Hancock,  Wm.  Blair,  W.  F.  Coolbaugh,  W.  M.  Egan,  S.  Cleary, 
R.  McChesney,  Chas.  Randolph,  H.  W.  King,  W.  E.  Doggett, 
Henry  Fuller,  S.  M.  Nickerson,  L.  B.  Sidway,  J.  S.  Rumsey  and 
W.  D.  Houghtelling. 

The  Board  reaffirmed  its  determination  not  to  recognize  "priv- 
ileges" as  business  transactions. 

The    Directors'   annual   report,   signed   by   Charles    Randolph, 
President,  under  date  of  April  2,   1866,  shows  the  financial  condi- 
tion of  the  Board,  the  contract  under  which  the  new  quarters  were 
leased,  and  the  activities  of  the  Board  during  the  preceding  year. 
The  report  reads:     "The   expenses  of  the  past  year   have   been 
unusually  large,  mainly  on  account  of  the  items  incident  to  the 
opening  and  occupation  of  our  new  hall  and  offices,  and  the  items 
paid  on  account  of  our  Regiments  and  Battery  and  the  Directors 
regret  the  necessity  of  showing  a  balance  on  the  wrong  side  of 
their  accounts ;  but,  inasmuch  as  it  is  not  expected  similar  calls 
will  be  made  upon  the  Board  for  the  ensuing  year,  they  have  con- 
cluded not  to  advance  the  price  of  the  annual  assessment  but  have 
fixed  it  at  twenty-five  dollars,  the  same  as  last  year,  and  express 
the  hope  that  unless  there  should  be  a  very  considerable  falling  oflf 
in  the  membership,  the  income  of  the  Board  for  the  coming  year 
will  be  sufficient  to  meet  the  expenses  and  pay  off  the  indebted- 
ness.    In  accordance  with  a  resolution  of  the  full  board,  passed 
on  the  26th  of  February,  1864,  the  Directors  appointed  a  committee 
to  confer  with  a  Hke  committee  of  the  Chamber  of  Commerce  to 
appraise  the  rental  of  that  portion  of  the  building  to  be  occupied  by 
us.    That  resolution  provided  that  this  Board  should  pay  an  annual 
rental  for  one  hundred  years,  based  upon  an  equitable  assessment 
of  the  whole  building,  that  will  secure  to  the  Chamber  of  Com- 
merce a  net  revenue  of  ten  per  cent  on  the  entire  cost   of  the 
property.     From   facts   developed   to   the    committee,   the   cost   of 
the  entire  building  and  ground  was  not  less  than  $400,000  (later 
figures  show  it  to  have  been  over  $425,000).     And  assuming  that 
nearly  one-half  of  the  rental  value  of  the  building,  including  halls 
'"  of  entrance  and  exit,  was  occupied  by  the  Board,  they  voted  to 
assess  the  annual  rental  for  the  Board  of  Trade  at  $20,000,  the 
^Chamber  of  Commerce  to  pay  all  taxes  and  insurance,  the  Board 
to  keep  in  repair  such  portions  of  the  building  as  were  occupied 
by  it,  the  cost  of  heating  the  building  to  be  apportioned  among 
the  various  parts  heated.     The  report  of  the  Committee  was  duly 
ratified  by  the  directors  and  a  lease  executed  in  accordance  with 
its  action.     The  membership  of  the   Board   during  the   past  year 
has  been  1401,  61  less  than  last  year,  which,  considering  the  advance 
in  the  annual  assessment  from  ten  to  twenty-five  dollars,  may  be 


[1866]  OF  THE  CITY  OF  CHICAGO  341 

considered  a  very  small  falling  off,  and  less  than  was  expected. 
During  the  past  year  the  Board  has  had  the  pleasure  of  welcoming 
home  the  soldiers  sent  to  the  defense  of  our  country  under  their 
auspices;  and  later  they  fulfilled  their  promise  by  causing  to  be 
brought  home,  and  properly  interred,  the  remains  of  the  fallen  of 
our  noble  battery.  And  now  that  peace  is  restored,  and  these  brave 
men  have  honorably  and  fully  discharged  the  duties  of  the  camp 
and  field,  this  Board  may  well  look  back  with  pride  on  the  efforts 
they  have  made  in  organizing  and,  so  far  as  they  could,  sustain- 
ing these  patriots,  who,  taking  our  name,  have  manfully  and  faith- 
fully upheld  the  cause  of  our  country  in  its  hour  of  darkness  and 
peril.  The  removal  of  the  Board  during  the  past  year  from  their 
old  to  their  present  quarters  has  proved  a  most  desirable  change. 
*  *  *  The  opening  of  the  hall  in  August  last  was  made  the 
occasion  of  inviting  large  delegations  to  visit  us  from  all  parts 
of  this  country  and  Canada,  where  commercial  organizations  were 
known  to  exist,  whose  business  was  to  any  considerable  extent 
connected  with  us.  *  *  *  During  the  past  year  an  entire  revi- 
sion of  the  rules  and  by-laws  of  the  Board  has  been  effected  and 
some  important  changes  made.  The  report  added  that  no  changes 
had  been  made  during  the  preceding  year  in  the  system  of  grain 
inspection  beyond  the  employnreht  of  inspectors  inside  the  ware- 
houses whose  duty  it  will  be  "to  see  that  all  grain  was  stored  and 
delivered  as  inspected,  without  any  adulteration  or  mixtures  of 
grades."  The  increased  expense  of  these  additional  inspectors  was 
placed  at  fully  $12,000.  In  order  to  meet  this  outlay  the  Board 
voted  to  increase  the  rate  for  inspecting  twenty-five  per  cent,  which 
would  yield  a  further  $8,000  upon  the  basis  of  the  preceding  year's 
receipts  for  inspection.  As  this  closer  inspection  would  benefit 
the  price  of  grain,  it  seemed  to  the  Directors  but  right  that  the 
grain  should  pay  the  cost.  Analyzing  the  financial  report  the  fol- 
lowing appears,  cents  omitted;  Principal  items  of  receipts:  from 
assessments,  $30,265;  from  grain  inspection,  $32,516.  Total  re- 
ceipts, $74,129.  The  disbursements  were  $76,035.86,  including  $9,- 
503.21  expended  for  receptions  tendered  the  returning  regiments 
and  for  the  burial  of  the  soldier  dead. 

At  an  adjourned  meeting  held  April  9  the  new  President,  J. 
C.  Dore,  delivered  his  inaugural  and  announced  that  the  Secretary 
and  other  appointees  would  be  retained.  The  question  of  the  raise 
in  inspection  charges  was  taken  up  and  it  was  moved,  but  not 
carried,  that  inspection  be  let  by  contract.  At  a  later  meeting 
the  Board  went  on  record  in  favor  of  appropriations  for  the  build- 
ing of  a  railroad  from  Lake  Superior  to  Puget  Sound,  and  urged 
the  passage  of  the  Northern  Pacific  bill.  While  the  earlier  months 
of  1866  were  quiet  ones,  the  year  was  destined  to  be  memorable 
for  the  Board  of  Trade.  Early  in  April  the  failure  of  B.  H.  Badger, 
through   gold   speculation,   caused   a   market   flurry   and   this   was 


342  HISTORY  OF  THE  BOARD  OF  TRADE  [1866] 

followed  by  sensational  disclosures  as  to  forged  warehouse  re- 
ceipts. These  were  of  large  proportions  and  involved  severe  losses 
to  many  traders.  Wilson,  one  of  the  perpetrators,  fled  to  Canada, 
but  was  lured  over  the  line  and  arrested  in  Detroit.  The  first  sen- 
sational jump  in  the  market  came  in  April  when  wheat  went  up 
10@18  cents  in  a  week.  It  mounted  steadily  until  $1.81  was  reached 
on  the  9th  of  May,  when  it  began  to  decline  and  touched  $1.55  on 
the  17th.  Just  prior  to  this  London  went  through  the  greatest 
financial  panic  it  had  known  since  1825.  Peto  &  Betts  and  Over- 
ender,  Gurney  &  Co.,  were  among  the  victims,  the  latter  failing 
with  immense  liabilities.  This  London  crash  sent  gold  up  and 
other  prices  soared  with  it. 

This  was  an  era  of  the  greatest  bank  swindling  this  country 
has  ever  known.  There  seemed  to  be  a  veritable  wave  of  embez- 
zlement. While  some  of  these  crimes  were  committed  in  Chicago, 
this  city  suffered  less  than  the  other  great  business  centers.  Wheat 
advanced  25  cents  in  the  week  of  May  2-9,  but  had  begun  to  de- 
cline when  war  between  Prussia  and  Austria  arrested  the  decHning 
tendency.  Gold  mounted  ten  points  and  cereals  responded  with 
increased  values.  The  high  price  brought  much  grain  to  market. 
The  week  ending  June  9  was  a  record  breaker,  the  grain  receipts 
exceeding  3,000,000  bushels,  of  which  nearly  2,000,000  bushels  were 
corn.  In  June  there  was  intense  excitement  in  gold  in  New  York 
and  the  precious  metal  went  from  $1.40  to  nearly  $1.70  within  a 
few  days,  carrying  all  other  prices  with  it  but  losing  most  of  the 
advance  in  two  days.  In  July  there  was  a  "corner"  in  No.  1  spring 
wheat  and  the  price  went  to  $1.91.  News  of  great  Prussian  vic- 
tories, which  meant  a  speedy  ending  of  the  war,  forced  prices  down 
again.  Wheat  was  quoted,  June  7,  at  $1.66j/2,  and  rose  irregularly 
through  the  month.  By  July  9th  it  had  reached  the  high  point, 
$1.91,  and  on  the  12th  it  fell  to  $1.65,  and  to  $1.43  by  the  17th.  This 
corner  created  much  adverse  newspaper  criticism  and  many  charges 
and  countercharges  among  the  members  of  the  Board.  It  was 
charged  that  the  warehousemen  aided  the  corner  by  false  represen- 
tations concerning  the  amount  and  quality  of  grain  in  store  and 
by  fraudulent  receipts.  It  was  urged  that  the  Secretary  register 
all  receipts,  giving  number  of  car,  etc.  In  August  it  was  claimed 
that  there  had  been  no  report  of  grain  in  store  for  two  months  and 
for  this  the  elevator  men  were  blamed.  Wheat  reached  $1.95  on 
August  24,  and  the  Express,  speaking  of  the  market  in  the  early 
part  of  September,  says :  "The  fluctuations  in  wheat  have  rarely 
been  exceeded.  Prices  up  10  and  down  5;  up  15  and  down  25,  up 
10  and  tending  upward,  are  short  phrases  for  telling  the  story. 
Large  amounts  have  been  made  and  lost  on  'Change  from  day 
to  day."  No.  1  spring  wheat  soon  passed  the  $2  mark  and  on 
Nov.  7  the  quotations  were  $2.23;  Dec.  31st  wheat  was  $2.15 J/2. 

A  heavy  frost  September  21st  gave  the  corn  market  a  great  im- 


[1866]  OF  THE  CITY  OF  CHICAGO  343 

petus  and  in  six  weeks  it  advanced  20  cents.  This  was  the  start 
of  a  corner  in  corn  and  by  the  first  week  in  November,  when  the 
corner  broke,  the  price  reached  $1.10.  By  the  15th  of  November 
it  had  receded  20  cents.  Corn  was  destined  to  remain  at  a  high 
level  for  a  long  time,  however,  and  in  1869  it  was  almost  at  par 
with  wheat.  Again,  after  this  corner,  legislation  for  the  control 
of  elevators  was  urged.  December  found  all  the  markets  dull, 
with  gold  going  down  and  prices  falling,  but  at  the  close  of  the 
year  there  was  a  rally  and  the  report  for  Dec.  31st  was  as  follows: 
"Grain  firmer,  except  oats.  No.  1  spring  wheat,  $2.15>4;  No.  2 
oats,  4iy2  cents;  No.  1  corn,  74@75  cents;  live  hogs,  $5.85@6.30; 
cattle  too  few  to  establish  a  market."  The  government  crop  report, 
published  in  October,  gave  the  corn  crop  as  large,  wheat  not  so 
good,  yield  about  143,000,000  bushels;  oats  excellent  crop  of  ex- 
traordinary quality,  the  yield  being  271,912,695  bushels. 

There  were  numerous  incidents  of  interest  to  Board  members 
during  the  year  outside  of  the  routine  of  business  and  the  excite- 
ment of  the  market.  That  prominent  members  were  interested 
in  the  welfare  of  the  city  and  in  philanthropic  projects  is  shown 
by  the  announcement  of  the  gift  of  a  site,  valued  at  $25,000,  by 
John  V.  Farwell  for  a  Y.  M.  C.  A.  building,  the  first  in  the  city, 
and  the  statement  that  J.  Y.  Scammon  would  open  his  home  for 
the  reception  of  contributions  for  the  National  Fair  to  be  held  at 
Washington  for  the  benefit  of  the  soldiers'  orphans  home.  In  July 
occurred  the  great  fire  at  Portland,  with  a  loss  of  $10,000,000.  Lit-  '^ 
tie  thinking  that  Chicago  would  be  the  scene  of  the  greatest  fire 
but  filled  with  a  desire  to  be  of  help  to  their  unfortunate  brothers, 
the  Board  of  Trade  was  active  in  relief  work  and  generous  in  con- 
tributions. President  J.  C.  Dore  was  a  member  of  the  general  com- 
mittee having  this  relief  work  in  charge. 

In  August  J.  W.  Pottle  resigned  as  director  and  a  close  elec- 
tion followed,  although  the  vote  was  small.  D.  A.  Jones  received 
151,  H.  C.  Ranney  178,  and  eight  scattering,  whereupon  Mr.  Ranney 
was  declared  elected. 

It  has  been  before  noted  that  during  the  war  the  Board  became 
angered  at  the  disunion  sentiments  of  the  Chicago  Times  and  denied 
that  paper  the  privileges  of  the  Exchange.  This  action  was  never 
forgiven  by  the  Times  and  it  was  particularly  sharp  in  its  criti- 
cisms of  the  Board.  It  was  during  this  year  that  the  great  contest 
as  to  reconstruction  was  being  waged,  and  events  transpired  which 
led  to  the  impeachment  of  President  Johnson.  While  this  feeling 
was  at  its  height  the  President  came  to  Chicago  to  deliver  an  ad- 
dress at  the  laying  of  the  corner  stone  of  a  monument  to  Senator 
Stephen  A.  Douglas.  It  was  at  first  planned  to  tender  the  Presi- 
dent a  reception  in  the  rooms  of  the  Board  of  Trade.  So  intense 
was  the  feeling,  however,  that  there  were  rumors  that  many  mem- 
bers objected  and  that,  if  the  program  was  carried  out,  it  was  their 


344  HISTORY  OF  THE  BOARD  OF  TRADE  [1866] 

intention  to  heckle  him  and  to  embarrass  him  if  possible.  Whether 
this  would  have  been  done  or  not  cannot  be  told,  but  there  was 
enough  credence  given  the  rumor  so  that  the  program  was  changed 
and  the  reception  was  held  at  the  Sherman  House.  On  September 
6th  the  Board  adjourned  and  took  official  part  in  the  corner-stone 
exercises  and  it  is  not  recorded  that  the  President  met  with  any 
indignity  during  his  Chicago  stay.  In  October  came  the  report 
of  the  great  famine  in  India,  which  naturally  had  an  eiifect  on  the 
market,  although  the  Suez  canal  was  not  yet  in  operation  and 
India  had  not  become  a  factor  in  the  world's  wheat  market. 

The  increasing  business  af  the  stock  yards  is  shown  by  the 
fact  that  for  the  first  time  a  secretary  was  employed  to  issue  reports 
of  the  live  stock  market,  and  that  it  was  found  necessary  and  profit- 
able to  increase  the  transportation  facilities  between  the  yards  and 
the  city.  A  street  car  line  was  established  in  November.  There 
were  two  dummy  engines  making  the  trip  every  twenty-four  min- 
utes, and  the  time  from  Lake  street  to  the  yards  was  38  minutes. 
Chicago  congratulated  itself  that  this  transportation  problem  was 
solved.  Later  in  the  same  month  the  live  stock  dealers  had  a  seri- 
ous misunderstanding  with  the  daily  press  of  the  city,  it  being 
charged  that  reports  as  printed  were  inaccurate  and  misleading. 
For  some  time  the  newspapers  were  denied  access  to  the  reports 
of  purchases  and  sales  and  the  papers  contained  but  a  bare  outline 
of  current  prices.  This  was  found  to  be  poor  business  for  both 
sides  and  a  compromise  was  soon  effected. 

According  to  the  census  taken  by  the  school  agent,  the  figures 
of  which  were  published  Oct.  24,  1866,  the  population  of  Chicago 
was  200,418.  Of  these  2,409  were  colored  and  90,026  were  under 
12  years  of  age. 

Transportation  facilities  were  constantly  being  extended,  but 
there  was  no  railroad  line  to  Omaha.  In  October  the  Northwestern 
reported  that  there  was  a  gap  of  but  sixty  miles  and  this  was  being 
rapidly  closed.  Travel  was  invited  to  Des  Moines  via  this  route, 
as  it  could  thus  be  reached  by  the  shortest  stage  route,  but  thirty- 
five  miles.  The  Rock  Island  also  reported  progress  and  stated 
that  it  would  have  a  wire  into  Des  Moines  within  thirty  days.  It 
was  hoped  soon  to  be  able  to  reach  Omaha  in  twenty-four  hours. 
During  this  year  mention  was  made  of  South  American  cattle  being 
shipped  to  England  in  considerable  numbers. 

Among  trade  items  of  interest  was  the  announcement,  in  April, 
that  the  "Montgomery,"  Captain  Gillis,  was  the  first  vessel  to  arrive 
through  the  straits  that  year,  and  that  it  had  earned  the  same  dis- 
tinction in  1865,  making  the  passage  April  18.  In  May  there  was 
a  considerable  controversy  when  it  was  alleged  that  certain  mem- 
bers were  cutting  commissions. 

Covering  the  Board  year,  from  April  1,  1866,  to  March  31, 
1867,  the  President  in  his  report  said,  in  part,  as  follows :     "The 


[1866]  OF  THE  CITY  OF  CHICAGO  34S 

year  opened  inauspiciously  but  proved  one  of  more  than  ordinary 
prosperity.  Every  branch  of  industry  has  been  amply  rewarded. 
The  business  of  the  Board  of  Trade  keeps  pace  with  the  rapid  devel- 
opment of  the  country.  The  iron  arms  of  commerce  are  continually 
extending  in  every  direction  from  Chicago  as  a  common  center, 
and  yet  they  are  scarcely  adequate  to  the  demand  for  transporta- 
tion. The  prospective  business  of  the  Board  is  limited  only  by 
the  future  development  of  the  Northwest."  Speaking  of  the  pro- 
vision trade  the  Secretary  said:  "The  provision  trade  during  the 
past  season  has  been  dragging  for  most  articles  of  hog  products, 
bulk  meats  excepted.  The  season  opened  with  a  declining  market 
for  hogs,  which  was  naturally  followed  by  a  falling  market  for  the 
product  until  near  the  close,  when  the  decreased  receipts  of  hogs 
gave  a  firmer  tone  and  prices  partially  recuperated.  The  business 
in  mess  pork  and  lard  has  not  been  a  satisfactory  one,  but  the 
movement  in  bulk  meats  was  quite  active,  and  it  was  universally 
observed,  both  in  this  and  other  markets,  that  the  consumptive 
demand  for  sides  and  shoulders  was  never  better.  Our  city  still 
retains  its  pre-eminence  as  the  greatest  packing  point  in  the 
world    and   the   largest   provision    market    in    the    United    States." 

Wheat 

The  movement  of  wheat  for  the  fiscal  year  1866-67  was 
practically  25  per  cent  larger,  both  in  and  out,  than  for  the  year 
preceding.  In  spite  of  some  violent  declines,  the  general  tendency 
of  the  market  was  upward.  The  price,  January  2,  1866,  was  $1.30J^ 
@1.31.  There  was  a  slight  period  of  depression  in  January  and  Feb- 
ruary, the  price  falling  to  $1.16,  and  $1.56>4  was  the  highest  point 
reached  by  the  latter  part  of  April.  On  May  1  the  market  was  easier, 
but  between  the  2nd  of  May  and  the  9th  wheat  advanced  fully  25 
cents  a  bushel  on  the  poor  outlook  for  the  growing  crop,  reaching 
$1.81.  After  selling  at  $1.91  in  July,  and  $1.35  in  August,  and  $1.92 
later  that  month,  the  $2  mark  was  passed  in  September,  and  a  new 
high  point  established  at  $2.23.  The  high  point  of  the  year  was 
reached  in  November,  at  $2.26,  and  the  year  closed  at  $2.15  for  No. 
1  spring.  In  common  with  all  other  commodities,  however,  the 
price  was  largely  influenced  by  the  price  of  gold,  and,  on  a  species 
basis,  wheat  was  not  so  high  as  it  appeared. 

Com 

The  receipts  and  shipments  of  corn  for  the  fiscal  year  1866-7 
were  the  largest  Chicago  had  ever  known,  exceeding  those  of 
1865-6  by  about  30  per  cent,  and  being  two  and  one-half  times  larger 
than  those  of  1864-5.  The  crop  of  1865  was  a  large  one  and  of  good 
quality,  and  the  heavy  receipts  from  that  crop  had  a  depressing- 
effect  on  the  price  until  October,  when  it  became  apparent  that  the 
new  crop  was  not  promising,  on  account  of  early  frosts.  Starting 
at  45  cents  on  January  2,  1866,  the  price  of  No.   1  corn  declined 


346  HISTORY  OF  THE  BOARD  OF  TRADE  [1866] 

to  37  cents  in  February  and  then  started  on  the  upgrade,  ranging 
in  the  40's  during  July  and  the  early  part  of  April,  and  reaching 
55^  the  latter  part  of  May  and  62  cents  in  July.  It  fell  back  again 
to  50  cents  the  first  of  September.  During  October  the  price  ranged 
from  62  to  99  cents,  and,  in  November,  owing  to  speculation  the 
price  touched  $1.07^.  Much  of  this  speculative  value  was  lost, 
but  the  price  did  not  fall  below  72>y2  cents  during  the  remainder  of 
the  year,  and  the  closing  quotation  December  31  was  74J/2  cents. 

Oats — While  the  receipts  of  oats  were  nearly  300,000  bushels 
more  than  in  1865-6,  the  shipments  were  more  than  1,000,000  less, 
and  the  prices  sank  lower  than  for  any  year  from  1865  to  1868,  and 
could  not  have  been  remunerative  to  producers,  especially  when 
compared  with  the  high  price  of  wheat.  The  war  had  made  a 
great  demand  for  oats  for  forage,  and  as  this  demand  ceased  with 
the  restoration  of  peace,  oats  were  a  drug  on  the  market.  Beginning 
the  year,  January  2,  1866,  at  25@25%  cents,  the  price  sagged  to 
22  cents  in  February,  and  it  was  not  until  April  that  it  reached 
31  cents.  From  that  time  until  the  last  of  September,  the  market 
did  not  vary  more  than  5  cents  in  either  direction ;  but  in  October 
they  advanced  to  52  cents,  declined  again  to  34i<^  cents  in  Novem- 
ber, and  after  another  sharp  movement  closed  the  year  at  41@42 
cents. 

Rye — The  receipts  and  shipments  of  rye  were  the  largest 
Chicago  had  known  up  to  this  time,  exceeding  those  of  1865-6  by 
about  500,000  bushels.  The  market  was  erratic  and  the  following 
statement  of  prices  best  shows  the  state  of  the  market:  January 
2,  1886,  No.  1  rye  was  quoted  55  cents;  February  1,  50  cents;  March 
1,  50  cents;  from  April,  1866,  to  December  31,  1866,  the  quotation 
for  No.  1  rye  for  the  first  week  in  each  month  was  as  follows:  for 
the  week  ending  April  7,  50  cents ;  May  5,  63@64  cents ;  June  2, 
69  cents;  July  7,  72  cents;  August  4,  55  cents;  September  8,  62yi@ 
65  cents ;  October  6,  79  cents ;  November  3,  $1.05@1.06^  ;  December 
1,  85  cents,  and  December  31,  at  the  close  of  the  year,  92  cents. 

Barley — As  with  rye,  the  receipts  and  shipments  of  1866-7 
were  the  largest  Chicago  had  ever  known,  and  not  only  this  but  the 
prices  were  fairly  remunerative.  The  crop  of  1865  was  exhausted 
early  in  the  year,  and,  according  to  the  official  report  of  the  Secre- 
tary, there  were  practically  no  quotations  on  the  old  crop.  The  new 
crop  began  coming  in  the  latter  part  of  August,  and  the  price  paid 
for  No.  2  barley  was  68@76  cents.  Prices  for  the  remainder  of  the 
year  were  as  follows:  For  the  week  ending  September  8,  53  cents; 
October  6,  70@73  cents;  November  3,  75@77  cents;  December  1, 
59@60  cents  ;  and  in  the  closing  week  of  the  year,  60@65  cents. 

In  September  the  I.  &  M.  Canal  was  closed  early  for  the  pur- 
pose of  making  improvements,  and  in  November  there  was  a  break 
in  the  Erie  Canal.  This  came  just  before  the  end  of  the  season 
when  cargoes  were  being  rushed  before  the  close  of  navigation. 


11867]  OF  THE  CITY  OF  CHICAGO  347 

The  rejoicing  over  the  success  of  the  cable  was  rather  premature 
and  it  was  not  until  the  latter  part  of  1866  that  foreign  markets  of 
the  day  before  were  regularly  received.  In  October  a  change  was 
made  in  commissions  on  purchases  from  samples  of  parcels  out 
of  warehouses,  and  the  price  was  fixed  at  one  cent  for  oats  and  two 
cents  for  other  cereals  per  bushel. 

1867 

The  year  1867  found  the  country  in  a  state  of  business  and 
political  unrest.  Money  was  tight.  Business  became  depressed. 
It  was  the  day  of  anti-railroad  conventions  and  agitations  in  the 
rural  districts.  It  was  the  time  when  the  President  and  the  Con- 
gress were  deadlocked,  and  above  all,  in  the  business  world,  it 
was  when  the  currency  problem  was  growing  more  acute  every 
day.  It  was  recognized  that  a  healthy  state  of  business  could  not  be 
maintained  with  a  currency  which  fluctuated  in  value  from  day  to 
day,  but  how  and  when,  if  at  all,  to  get  to  a  specie  basis  was  the 
question  which  deserved  and  received  the  best  and  most  anxious 
thought  of  business  men.  Then,  as  later,  there  were  currency 
expansionists,  who  believed  in  fiat  currency  and  that  cheap  money 
meant  higher  prices  and  greater  ease  in  the  payment  of  indebted- 
ness. There  were  those,  too,  who  had  no  patience  with  this  theory 
and  who  believed  in  the  resumption  of  specie  payments  and  that 
"the  way  to  resume  was  to  resume."  Both  classes  were  represented 
in  the  Board  of  Trade,  but  the  majority,  while  for  sound  currency, 
was  conservative  and  did  not  wish  such  hasty  action  as  would  bring 
panic  and  sudden  disarrangement  of  prices.  On  December  29,  1866, 
the  Board  of  Trade  met  for  the  purpose  of  discussing  the  great 
question,  and  as  a  result  of  much  deliberation  the  following  reso- 
lution was  passed : 

"Resolved,  That  a  more  rapid  contraction  of  the  currency 
than  is  now  provided  by  law  would  be  very  detrimental,  if  not  ruin- 
ous, to  the  country."  Commenting  on  this  action  the  "Express"  said : 

"The  vote  in  favor,  as  near  as  could  be  judged  from  vive  voce, 
was  two-thirds  in  a  not  very  full  attendance,  but  probably  it  was 
a  fair  expression  of  the  sentiment  of  the  full  board.  The  adoption 
of  the  resolution  was  a  rebuff  to  the  inflationists  on  the  one  hand 
and  the  rapid  contractionists  on  the  other.  The  former  had  intro- 
duced a  resolution  'that  a  rapid  contraction  would  be  detrimental,' 
etc.,  which,  of  course,  was  intended  to  oppose  any  contraction  at 
all ;  the  extreme  contractionists  put  forth  a  resolution  approving 
McCulloch's  policy  for  an  early  return  to  specie  payments,  mean- 
ing, of  course,  the  earliest  possible  return.  The  fact  is  patent  that 
the  majority  of  business  men  feel  convinced  that  financial  affairs 
are  working  about  right;  the  gold  premium  comes  down  gradually, 
but  surely,  and  if  a  crash  shall  supervene  it  will  be  the  fault  of  those 
who  have  believed  that  the  inflationists  would  carry  the  day,  and 
who,  therefore,  have  not  prepared  for  a  healthy  contraction." 


348  HISTORY  OF  THE  BOARD  OF  TRADE  [1867] 

In  the  light  of  subsequent  events  it  is  easy  to  see  that  a  more 
rapid  return  to  specie  would  have  been  better,  but  it  required  the 
lesson  of  "Black  Friday"  to  impress  it  upon  the  people  and  to 
prepare  the  way.  The  resolution  as  passed  by  the  Board  of  Trade 
undoubtedly  represented  the  best  business  judgment  of  the  country 
at  the  time. 

Of  minor  importance  was  the  adoption  of  the  "cental"  sys- 
tem. This  was  not  the  metric  system,  but  was  simply  the  adoption 
of  the  English  system  of  basing  transactions  upon  the  hundred 
pounds,  rather  than  upon  the  bushel.  In  the  fall  of  1866  the  Boards 
of  Trade  of  Buffalo,  Detroit  and  Albany  passed  resolutions  to  adopt 
this  standard  at  a  future  date,  and  in  January,  1867,  Chicago  fell 
in  line  and  resolved  to  adopt  the  cental  system  on  and  after  March 
1.  As  the  date  approached  the  trade  papers  published  elaborate 
tables  showing  just  how  many  bushels  there  were  to  a  hundred 
pounds  of  wheat,  corn,  oats,  etc.  The  "Express"  went  so  far  as  to 
give  market  quotations  in  both  systems.  But  it  was  of  no  avail. 
The  grain  started  from  the  farm  in  bushels  and  it  stayed  that  way, 
in  spite  of  all  .the  good  resolutions  of  Boards  of  Trade.  Although 
the  resolution  was  adopted  practically  unanimously,  there  was  no 
real  attempt  to  use  the  new  system  on  March  1,  or  on  any  other  date. 
On  March  27  the  Board,  seeing  the  folly  of  having  a  rule  which  was 
not,  and  seemingly  could  not  be  enforced,  passed  a  resolution 
rescinding  the  former  action.  The  resolution  said :  "Whereas,  The 
adoption  of  the  cental  system  in  the  purchase  and  sale  of  grain 
appears  to  be  impracticable  and  is  generally  unpopular;  therefore. 
Resolved,  That  this  Board  adhere  to  its  past  and  present  custom 
of  buying  and  selling  grain  by  the  bushel  and  hereby  rescinds  all 
prior  action  to  the  contrary."  The  fate  of  the  cental  system  was 
the  same  at  Buffalo,  Oswego,  Toledo  and  all  the  other  cities  where 
it  was  adopted,  but  never  really  tried. 
^  Of  far  greater  and  more  immediate  importance  to  the  Board 
'  of  Trade  of  Chicago  than  either  the  currency  question  or  the 
cental  system  was  the  warehouse  legislation,  the  first  of  its  kind, 
passed  by  the  Legislature  of  Illinois.  It  has  been  seen  that  in 
preceding  years  there  were  many  charges  of  unfairness,  discrimina- 
tion and  positive  fraud  in  connection  with  the  elevating  and  ware- 
house business.  This  agitation,  while  carried  on  by  the  daily  press 
and  by  outraged  producers,  was  not  confined  to  them,  but  was 
joined  in  by  many  members  of  the  Board  of  Trade.  It  became 
evident,  early  in  1867,  that  some  legislation  was  inevitable.  Sam- 
ples showing  misgrading  were  exhibited  on  the  floor  of  the 
Exchange  and  created  much  comment.  The  "Express"  of  Jan.  23 
quoted  from  the  Chicago  "Tribune"  as  follows : 

*  *  *  "Facts,  charges,  surmises  and  suspicions  show  that, 
as  at  present  conducted,  the  grain  trade  of  the  Northwest  is  demor- 
alized.    It  abounds  in  abuses  which  vex  and  defraud  every  honest 


11867]  OF  THE  CITY  OF  CHICAGO  349 

dealer,  and  inflict  great  harm  upon  our  city.     We  think  the  ques- 
tion is  a  proper  one  for  our  Legislature  to  consider,  and  we  are  in 
favor  of  legislative  enactments  whereby  these  evils  shall  be  miti-        , 
gated  if  not  entirely  removed.     First,   let  the   Legislature   pass  a        ' 
law  compelling  all  railroads  to  give  a  specific  receipt  for  the  num-  i.d.d  n> 

ber  of  pounds  of  grain  shipped  in  bulk.  This  will  determine  where 
the  leakage  is  if  there  be  any.  Second,  compel  the  railroads  to  deliver 
grain  at  any  warehouse  specified  by  the  shippers,  if  there  be  a  rail- 
road track  to  it,  whether  the  same  belong  to  it  or  any  other  rail- 
road. This  will  break  down  the  monopoly  which  now  exists,  and 
open  up  the  elevator  business  to  competition.  Third,  adopt  a 
uniform  grade  of  inspection  throughout  the  State  making  weight 
one  of  the  essentials  and  taking  for  a  basis  the  grades  adopted  by 
our  Board  of  Trade,  which  may  be  vested  with  discretionary  power 
to  change  the  same,  when  the  nature  or  condition  of  the  crop 
demands  it.  Fourth,  require  the  railroad  agents  who  receipt  for  the 
grain  on  the  cars  to  specify  the  grade  in  the  receipt.  If  legislation 
can  reach  the  evils  complained  of  this  is  the  way  to  do  it,  and  noy 
honest  man  can  object  to  such  a  law." 

On  the  22d  of  January  the  Directors  of  the  Board  of  Trade  held 
a  meeting  and,  without  taking  the  Board  as  a  whole  into  their  con- 
fidence, sent  ex-President  Charles  Randolph  to  Springfield  with 
a  bill  already  prepared  for  passage,  and  which  he  was  to  urge  before 
the  Legislature.  When  this  action  and  the  nature  of  the  proposed 
bill  became  known  to  the  members  they  informally  expressed  their 
dissent.  This  was  confirmed  at  a  formal  meeting  at  which  the 
President  presided.  Resolutions  were  discussed  and  adopted  and 
a  committee  was  appointed  to  go  to  Springfield  to  oppose  the  action 
of  the  Directors.  The  Board  demanded  uniformity  of  inspection, 
accurate  weighing,  faithful  care,  honest  delivery,  and  the  "Express" 
charged  Randolph  with  being  favorable  to  the  warehousemen.  Con- 
cerning this  action  of  the  Board  the  "Express"  of  Jan.  23,  1867, 
had  this  to  say : 

"The  bill  now  before  the  Legislature  concerning  the  warehous- 
ing of  grain  excites  a  good  deal  of  discussion  on  'Change  and  among 
business  men  generally;  it  was  to  have  been  considered  at  a  special 
meeting  of  the  Board  of  Trade  next  Saturday  morning,  but  the 
Board  would  not  delay  so  long  and  one  of  their  number  mounted 
a  table  and  read  the  following,  which  was  passed  unanimously, 
though  of  course  informally,  amid  exciting  cheers,  showing  the 
feeling  of  the  Board  : 

"  'Whereas,  This  Board  has  learned  with  pleasure  that  efforts 
are  being  made  at  Springfield  to  secure  the  passage  of  laws  to 
remedy  the  evils  which  exist  in  the  system  of  grain  warehouses  in 
this  city,  and  that  a  bill  for  this  purpose  has  already  been  intro- 
duced into  the  State  Legislature  by  one  of  our  representatives,  and 
we  understand  that  other  bills  will  also  be  presented,  and, 

"  'Whereas,  We  believe  that  there  are  serious  abuses  exerting 
a  very  depressing  influence  upon  the  grain  trade  and  through  it 


J 


350  HISTORY  OF  THE  BOARD  OF  TRADE  [1867] 

upon  the  general  trade  of  the  city  and  should  be  remedied ;  there- 
fore be  it 

"  'Resolved,  That  any  action  which  may  be  taken  by  the  State 
Legislature  towards  placing  the  grain  warehouses  of  this  city 
under  wholesome  legal  restrictions  will  meet  with  the  unqualified 
approbation  and  the  cordial  sympathy  and  support  of  the  Board. 

"  'Resolved,  That  copies  of  this  resolution  be  sent  to  the  Legis- 
lature and  that  Cook  County  representatives  be  asked  to  act  to 
secure  the  passage  of  a  law  which  will  give  to  the  people  ample 
protection  from  the  abuses  which  have  become  so  oppressive  in 
connection  with  the  warehouse  system.'  " 

Messrs.  Randolph  and  McChesney  were  the  champions  of  the 
so-called  elevator  bill  and  Mr.  Eastman  was  the  author  of  the  bill 
backed  by  the  Board  of  Trade  as  a  whole.  The  State  now  had  the 
spectacle  of  the  Board  divided  against  itself,  the  Directors  repre- 
sented by  Randolph  and  the  members  represented  by  Eastman 
and  by  a  committee  of  100,  which  was  appointed  to  go  to  Spring- 
field to  fight  for  the  bill.  The  "Express,"  commenting  upon  this 
action  said,  naively :  "It  seems  to  be  conceded  that  money  is  neces- 
sary to  direct  legislation,"  showing  plainly  how  different  condi- 
tions were  in  1867  to  what  they  are  today.  The  Eastman  bill  was 
passed  containing  many  of  the  features  wished  by  the  Board  of 
Trade,  but  owing  to  the  difference  of  opinion  among  themselves, 
and  to  the  popular  prejudice  which  has  always  existed  against  the 
middleman  of  any  kind,  there  was  a  "joker"  added,  which  was  not 
in  the  original  bill,  and  which  was  not  at  all  to  the  liking  of  the 
Board.  This  provision  made  it  a  criminal  offense  to  deal  in  futures, 
and  imposed  fines,  one-half  of  which  were  to  go  to  the  informer. 
At  a  special  meeting  held  in  October,  1865,  the  Board  had  passed 
rules  recognizing  dealing  in  "futures"  as  a  legitimate  form  of  trad- 
ing. This  kind  of  trading  had  long  been  a  feature  of  the  grain 
market,  which,  indeed,  could  not  well  be  conducted  without  it. 
While  pleased  with  the  provisions  of  the  warehouse  bill  proper,  the 
members  of  the  Board  were  highly  incensed  at  this  provision,  which 
made  criminals  of  them  if  they  continued  to  engage  in  business 
activities  which  they  believed,  and  which  the  courts  afterwards 
decided,  were  perfectly  legitimate  and  necessary  to  the  proper  con- 
duct of  trade.  Acting  upon  the  advice  of  attorneys  they  resolved 
to  ignore  this  provision  of  the  law,  to  proceed  with  their  business 
in  a  normal  and  legitinjate  way,  and,  if  molested,  to  depend  upon 
the  courts  for  justice.  It  was  generally  believed  by  the  Board  that 
this  provision  was  inserted  through  the  influence  of  the  warehouse 
men  in  retaliation  for  the  action  of  the  Board  in  exposing  the  evils 
of  the  warehouse  system  and  for  insistence  upon  the  passage  of 
a  regulatory  law.  The  Board  had  not  hesitated  to  expose  the 
scandals  in  connection  with  the  warehousing  of  grain,  the  prefer- 
ence shown  by  the  railroads  for  certain  warehouses,  which  laid  them 


[1867]  OF  THE  CITY  OF  CHICAGO  351 

open  to  the  charge  of  acting  in  collusion  with  the  preferred  ele- 
vators; the  manner  in  which  grain  had  been  handled  and  mixed  in 
an  arbitrary  way  and  the  many  other  injustices  imposed  upon 
shippers  and  dealers.  Failing  to  defeat  the  bill,  it  was  charged 
that  the  interests  involved  had  caused  these  objectionable  sections 
to  be  added  in  order  to  make  the  whole  bill  odious  and  to  revenge 
themselves  upon  the  Board.  The  provisions  of  the  warehouse  part 
of  the  law  were  good.  It  was  made  unlawful  for  any  railroad  to 
deliver  grain  into  any  warehouse  other  than  that  into  which  it  was 
consigned,  without  consent  of  the  owner  or  consignor  thereof.  The 
warehousemen  were  divided  into  two  classes,  called  "public  ware- 
housemen" and  "private  warehousemen"  respectively.  Section  3 
provided  that :  "Every  private  warehouseman  shall  keep  the  grain 
of  every  person  that  may  be  stored  with  such  warehouseman  entirely 
separate  and  distinct  from  the  grain  or  property  of  a  like  nature, 
kind  or  quality  of  any  other  person  or  persons,"  etc'  And  the  suc- 
ceeding section  prohibits  the  private  warehousemen  to  mix  the 
grain  of  different  owners  on  penalty. 

Section  6  provides  that  it  shall  be  lawful  for  public  warehouse- 
men to  store  grain  in  bulk  and  mix  the  grain  of  like  kind  and  grade 
of  different  owners ;  and  the  succeeding  section  provides  the  safe- 
guard that  "No  public  warehouseman,  in  such  places  where  law- 
fully authorized  inspectors  of  grain  shall  be  appointed,  shall  receive 
any  grain  for  storage  until  it  was  so  inspected  and  graded."  Pro- 
vision is  made  for  mixing,  drying  and  cleaning  grain  upon  owners' 
request ;  but  grain  so  treated  was  not  to  be  mixed  with  other  grain 
which,  on  being  received  into  store,  was  inspected  at  a  higher  or 
better  grade,  nor  was  it,  after  being  dried  and  cleaned  and  placed 
in  special  bin,  to  be  delivered  upon  any  receipt  of  any  such  ware- 
houseman calling  for  the  delivery  of  any  grain  by  grade,  same  upon 
receipt  calling  for  the  same  grade  given  such  grain  upon  inspection 
into  store.  The  exceptional  position  of  the  Chicago  Board  of  Trade 
was  recognized  perfunctorily,  in  section  9,  as  follows :  "All  persons 
keeping  public  warehouses  in  the  city  of  Chicago  shall  file  with  the 
Board  of  Trade  of  said  city,  on  Tuesday  of  each  week,  a  statement, 
showing  the  amount  of  each  kind  of  grain  in  store  in  such  ware- 
houses up  to  the  Saturday  night  preceding  such  statement."  So 
far  as  the  warehouses  and  railroads  were  concerned,  the  Legislature 
had  done  no  more  than  the  Board  had  constantly  urged,  and,  to  the 
limits  of  their  power,  enforced,  but  the  sting  of  the  measure  was 
in  its  tail.  The  objectionable  features  of  the  act  were  contained  in 
sections  17,  18,  19  and  20. 

Section  17  provided  that :    "All  contracts  for  the  sale  of  grain 
for  future  delivery,  except  in  cases  where  the  seller  is  the  owner     ^ 
or  agent  of  the  owner  of  such  grain  at  the  time  of  making  the  con- 
tract and  in  actual  possession  thereof,  are  hereby  declared  void  and 
gambling  contracts,  and  all  money  paid  in  settlement  of  differences 


^52  HISTORY  OF  THE  BOARD  OF  TRADE  [1867] 

■on  any  such  contracts  may  be  recovered  back  in  the  same  manner 
as  other  money  lost  in  gambling." 

Section  18  provided  that :  "All  parties  to  any  such  gambling 
■contract  shall  be  deemed  guilty  of  a  misdemeanor,  and  upon  con- 
viction thereof  shall  be  fined  one  thousand  dollars  and  imprisoned 
not  exceeding  one  year  in  the  county  jail,  and  one-half  of  said  fine 
shall  go  to  the  informer,  who  is  hereby  declared  to  be  a  competent 
witness  on  the  trial  of  parties  indicted  under  this  act." 

Section  19  reads :  "Any  person  who  shall  loan  grain  or  ware- 
Tiouse  receipts  thereof  to  any  other  person,  to  be  used  for  delivery 
on  short  contracts  or  for  purposes  of  speculation  merely,  shall  be 
■deemed  guilty  of  a  misdemeanor  and  subject  to  the  punishment 
provided  in  the  preceding  section ;  and  in  such  cases  the  informer 
shall  receive  one-half  the  fine  and  be  a  competent  witness  as  afore- 
said." 

Section  20  is  as  follows :  "In  penal  proceedings,  under  the  last 
two  preceding  sections,  no  warehouse  receipt  shall  be  received  in 
evidence  of  ownership  or  possession  of  grain  by  the  defendant  at 
the  time  of  making  such  contract ;  and,  in  all  cases,  proof  on  the  part 
of  the  prosecution  of  a  contract  made  by  the  defendant  for  the  sale 
of  grain  for  future  delivery  shall  be  prima  facie  evidence  that  such 
contract  was  a  gambling  one  and  void." 

These  sections  were  vindictive  in  intent  and  unconstitutional 
in  matter  and  form,  as  lawyers  generally  were  aware  when  the  meas- 
ure passed.  The  Board  was  advised  by  Messrs.  Arrington  &  Dent, 
eminent  counsels,  to  that  efifect ;  and  decided  to  continue  trading 
in  "futures,"  as  heretofore  provided  under  their  rules  and  regu- 
lations. The  outcome  was  not  very  long  deferred.  Daniel  A. 
•Goodrich,  then  a  member  of  the  law  firm  of  Goodrich  &  Moulton, 
secured  the  issue  of  warrants  for  a  number  of  the  most  prominent 
grain  shippers,  dealers  and  brokers  in  the  city.  These  warrants 
(part  of  them  at  least)  were  served  during  'Change  hours  August 
10,  1867. 

A  constable  appeared  on  the  floor  of  the  chamber  with  war- 
rants for  the  arrest  of  nine  members  on  the  charge  of  gambling. 
Having  some  difficulty  in  locating  the  members  wanted,  it  was 
suggested  by  B.  P.  Hutchinson,  who  was  one  of  those  to  be  arrested, 
that  the  deputy  call  the  roll  of  those  for  whom  he  had  warrants, 
and  that  they  would  respond  as  their  names  were  called.  This  was 
done,  and  seven  of  the  nine,  the  others  being  absent,  stepped  out  as 
their  names  were  called,  amidst  the  applause  of  the  members.  Those 
arrested  at  this  time  were  Charles  B.  Pope,  B.  P.  Hutchinson,  John 
J.  Richards,  Wm.  J.  Scheik,  Howard  Priestly,  A.  Eichhold  and  Don 
Carlo  Scranton.  The  members  in  a  body  escorted  the  prisoners  to 
hacks  which  had  been  called  in  the  emergency,  and  they  were 
driven  off,  while  the  members  cheered.  Upon  learning  by  whom 
the  charges  were  filed  Mr.  Goodrich  was  subjected  to  a  severe 
tongue-lashing.     A  preliminary  hearing  was   held  and   the   mem- 


[1867]  OF  THE  CITY  OF  CHICAGO  3S3 

bers  signed  each  others'  bonds  and  were  released,  the  case  going 
over  to  the  Recorder's  Court.  The  seven  returned  to  'Change  and 
were  received  with  an  ovation. 

E.  K.  Bruce,  C.  B.  Goodyear,  Geo.  J.  Brine  and  Geo.  M.  How 
were  arrested  later  in  the  day  and  haled  before  the  justice.  They 
furnished  bonds  for  their  appearance  and  Geo.  J.  Brine  insisted 
that  Mr.  Goodrich  also  furnish  bonds  for  his  appearance  as  a  wit- 
ness. His  bond  was  placed  at  $3,000.  These  cases  never  came  to 
trial,  as  the  complainant  was  unable  to  furnish  the  required  bonds, 
and  no  one  else  cared  to  prosecute.  The  law  was  later  decided  to 
be  constitutional,  but  it  was  unenforced  by  common  consent,  and  at  ^ 
the  next  session  of  the  Legislature  the  obnoxious  provisions  were 
repealed. 

August  14,  after  the  arrest  of  the  members  and  while  the  case 
was  pending,  a  special  meeting  of  the  Board  was  called  to  take 
action  in  regard  to  the  afifair.  Resolutions  offered  by  Mr.  Randolph 
were  adopted  after  discussion  and  some  amendment.  These  reso- 
lutions declared  that  the  members  could  see  no  wrong  in  and  could 
recognize  no  moral  difference  between  transactions  on  'Change  and 
other  transactions  where  property  was  delivered  at  the  time  of  sale; 
and  that  the  Board  would,  in  the  future,  as  in  the  past,  stamp  with 
its  disapproval  and  condemnation  any  and  all  acts  of  its  members 
not  in  accordance  with  the  recognized  principles  of  commercial 
integrity.  The  Directors  were  requested  to  procure  counsel  to 
defend  members  charged  with  the  violation  of  the  law. 

Some  years  before  the  gentlemen  in  Springfield  passed  their 
Warehouse  Act  of  1867,  Congress  had  undertaken  to  declare  that 
all  contracts  for  the  future  delivery  of  gold,  by  other  than  one  hav- 
ing actual  possession  at  the  time  of  the  contract,  were  void,  and 
gambling  contracts,  and  parties  so  selling  were,  upon  conviction, 
liable  to  fine  and  imprisonment.  The  law  was  almost  identical  with 
the  offensive  sections  of  the  warehouse  act  above  cited.  The  result 
of  congressional  action  was  that  it  drove  from  the  gold  room  all  but 
actual  possessors  of  gold,  thus  a  monopoly  was  established,  and 
the  premium  on  gold  advanced  100  per  cent. 

When  the  matter  of  dealing  in  "futures,"  that  is  to  say,  buying 
and  selling  commodities  for  future  delivery,  was  taken  before  the 
court,  the  position  taken  by  the  Board  was  vindicated  on  all  points.  ^^ 

The  opinion  of  the  Supreme  Court  of  the  United  States  in  the  case       [y  *Vf 
of  the  Board  of  Trade  vs.  Christie  (198  U.  S.,  p.  236),  delivered  by      y 
Mr.  Justice  Holmes,  was  in  part  as  follows :  ( 

"When  the  Chicago  Board  of  Trade  was  incorporated,  we  can- 
not doubt  that  it  was  expected  to  afford  a  market  for  future  as  well 
as  present  sales,  with  the  necessary  incidents  of  such  a  market,  and 
while  the  State  of  Illinois  allows  that  charter  to  stand,  we  cannot 
believe  that  the  pits  merely  as  places  where  future  sales  are  made 
are  forbidden  by  the  law.    Of  course,  in  a  modern  market,  contracts 


354  HISTORY  OF  THE  BOARD  OF  TRADE  [1867] 

are   not   confined   to    sales    for    immediate    delivery.      People    will 
endeavor  to  forecast  the  future  and  to  make  agreements  according 
/^  to  their  prophecy.     Speculation  of  this  kind  by  competent  men  is 

the  self-adjustment  of  society  to  the  probable.     Its  value  is  well 
known  as  a  means  of  avoiding  or  mitigating  catastrophes,  equalizing 
prices  and  providing  for  periods  of  want.     It  is  true  that  the  suc- 
cess of  the  strong  induces  imitation  by  the  weak,  and  that  incom- 
petent persons  bring  themselves  to  ruin  by  undertaking  to  specu- 
j.  k  i  late  in  their  turn.    But  legislatures  and  courts  generally  have  recog- 
X^    I  nized  that  the  natural  evolutions  of  a  complex  society  are  to  be 
\       I  touched   only   with   a   very   cautious   hand,   and   that   such    coarse 
'  attempts  at  a  remedy  for  the  waste  incidental  to  every  social  func- 
tion as  a  simple  prohibition  and  laws  to  stop  its  being  are  harmful 
and  vain." 

The  American  and  English  Encyclopedia  of  Law,  volume  XIV, 
second  edition,  page  614,  says :  "Though  it  has  been  said  by  high 
authority  that  all  contracts  of  insurance  are  in  essence  wagering 
contracts,  yet  the  view  accepted  and  supported  by  the  overwhelm- 
ing weight  of  authority  is  that  contracts  of  insurance  are  gambling 
or  wagering  contracts,  only  when  the  person  insured  is  without  an 
'insurable  interest'  in  the  subject-matter  of  the  policy." 

The  annual  election  created  much  interest,  owing  to  the  division 
of  sentiment  as  to  the  warehouse  law.  Candidates  brought  forward 
in  March  for  the  Presidency  were  W.  M.  Egan,  R.  McChesney  and 
N.  K.  Fairbank.  At  the  election,  held  April  1,  1867,  W.  M.  Egan 
was  an  easy  victor.  The  new  officers  were  as  follows :  President, 
W.  M.  Egan;  First  Vice-President,  Lyman  Blair;  Second  Vice- 
President,  C.  B.  Goodyear;  Secretary,  John  F.  Beaty;  Treasurer, 
Geo.  F.  Rumsey.  Directors,  term  expiring  1868:  J.  H.  Dole,  H.  A. 
Towner,  H.  Botsford,  T.  H.  Seymour,  H.  C.  Ranney.  Directors, 
term  expiring  1869:  W.  E.  Richardson,  W.  H.  Lunt,  S.  H.  McCrea, 
G.  M.  How  and  George  Field.  Commercial  Committee :  J.  C.  Dow, 
H.  C.  Ranney,  Charles  Randolph,  R.  McChesney,  W.  D.  Hough- 
teling,  W.  T.  Coolbaugh,  J.  L.  Hancock,  J.  M.  Douglass,  P.  W. 
Gates,  S.  Clement,  W.  E.  Doggett,  Nathan  Mears,  J.  V.  Farwell, 
W.  R.  Gould,  R.  Prindiville,  Ira  Y.  Munn,  Wm.  Blair,  S.  Clary, 
T.  B.  Sidway,  N.  K.  Fairbank,  P.  Wadsworth  and  S.  M.  Nickerson. 
On  the  Monday  following  the  election  there  was  a  Board  meeting, 
at  which  the  minor  officers  were  announced  as  well  as  the  committee 
assignments.  Ex-President  Dore  delivered  an  address  in  which 
he  urged  the  Board  to  give  its  support  to  measures  of  public  utility, 
and  President  Egan  in  his  inaugural  pledged  himself  to  devote  his 
energies  to  the  extension  of  the  usefulness  of  the  Board  and  to 
harmonious  action. 

On  April  12,  1867,  a  special  meeting  was  held  to  consider  the 
report  of  a  committee  on  the  provisions  of  the  warehouse  law.  As 
a  result  of  this  meeting  the  following  resolution  was  adopted : 


[1867]  OF  THE  CITY  OF  CHICAGO  355 

"Resolved,  That  hereafter  all  sales  of  grain  in  store  by  grade 
shall  be  considered  filled  by  the  specified  grade  in  any  warehouse 
receiving  by  railroad  or  canal  (unless  special  warehouse  is  desig- 
nated at  the  sale),  and  that  at  all  such  deliveries  all  buyers  shall 
be  entitled  to  at  least  three  days,  without  extra  storage  on  receipts." 

The  annual  report  for  the  year  ending  March  31,  1867,  showed 
the  Board  in  much  better  financial  position.  The  debt  had  not  been 
entirely  wiped  out,  but  it  had  been  largely  reduced.  The  financial 
report  showed  as  follows :  Receipts,  $97,060.55,  of  which  more 
than  $55,000  was  derived  from  grain  inspection  and  over  $31,000 
from  annual  assessments.  The  chief  items  of  expense  were 
$43,687.02  for  inspection  service  and  $30,570  for  current  expenses. 
More  than  $9,000  had  been  paid  on  the  deficit  of  the  previous  year. 

After  deducting  $366.81  (the  cash  in  the  hands  of  the  Secre- 
tary and  therefore  an  asset)  from  $2,195.80,  the  amount  due,  to  the 
Treasurer,  there  still  remained  a  net  deficit  of  $1,829.05  to  carry 
over  into  the  next  year.  After  a  careful  review  of  the  situation,  the 
directors  advised  against  any  immediate  change  in  rates  of  inspec- 
tion and  proceeded :  "The  membership  of  the  Board  in  1864  was 
1,462;  in  1865  it  was  1,401 ;  the  last  year  it  was  1,259.  It  is  not  sur- 
prising that  the  membership  of  the  association  should  have  dimin- 
ished during  the  last  two  years,  considering  the  increase  of  the 
annual  assessment.  Last  year  the  annual  assessment  was  based  on 
a  supposed  membership  of  1,200,  though  proved  to  be  1,259.  This 
year,  in  view  of  the  probability  that  the  rates  of  inspection  will  not 
pay  the  expenses  of  inspection  until  after  the  harvest,  the  directors 
have  deemed  it  advisable  to  fix  the  annual  assessment  at  thirty-five 
dollars.  The  current  expenses  of  the  year  have  not  been  materially 
increased  by  extraordinary  expenses,  and,  unless  some  unforeseen 
emergency  shall  arise,  the  Board  may  reasonably  hope  that  the 
annual  assessment,  after  the  present  year,  will  rather  be  diminished 
than  increased." 

The  packing  statistics  of  the  West  for  the  season  1866-7,  as 
announced  in  the  Cincinnati  "Price  Current"  of  March  27,  showed 
that  Chicago  had  maintained  its  pre-eminence  as  a  packing  center. 
According  to  this  report  the  pack  was  as  follows :  56  cities  in  Ohio, 
636,982;  45  cities  in  Illinois,  831,442;  50  cities  in  Indiana,  299,204; 
17  cities  in  Iowa,  115,241 ;  3  cities  in  Wisconsin,  135,060;  15  cties  in 
Missouri,  233,230;  3  cities  in  Kentucky,  174,085;  total,  2,425,244. 

Of  these  Chicago  packed  639,332;  Cincinnati,  462,610;  Louis- 
ville, 157,071;  St.  Louis,  176,800,  and  Milwaukee,  133,370.  This 
table  shows  a  total  of  189  cities  where  packing  was  a  considerable 
interest. 

In  May,  elevator  "A,"  of  Armour,  Dole  &  Co.,  was  burned,  and 
the  elevator  capacity  was  not  so  large  but  that  this  was  a  distinct 
handicap  to  the  trade.    A  statement  made  in  the  "Express"  of  May 


356  HISTORY  OF  THE  BOARD  OF  TRADE  [1867] 

22nd  tells  that  59  business  concerns  in  Chicago  did  a  business 
exceeding  a  million  dollars  during  the  year  preceding.  Of  these 
59  firms,  31  were  produce  commission  houses  and  seven  were 
packers.  The  largest  concerns  were  given,  as  follows :  Field, 
Palmer  &  Leiter,  $9,220,967;  Farwell  &  Co.,  $6,948,328  :/Munn, 
Norton  &  Scott,  $3,335,468. 

It  was  in  this  year  that  Alaska  was  purchased  from  Russia  for 
$15,000,000.  While  no  official  endorsement  was  given  of  the  pur- 
chase by  the  Board,  it  met  with  the  hearty  approval  of  the  members. 

By  this  time  all  the  world  had  taken  note  of  Chicago  and  its 
rapid  growth  and  importance  as  a  commercial  center.  The  western 
States  have  always  been  loyal  to  Chicago,  proud  of  its  growth, 
glorying  in  its  triumphs  and  justly  claiming  a  share  in  its  marvellous 
successes,  but  it  must  not  be  supposed  that  other  cities  looked  with 
magnanimity  upon  the  ever  growing  trade  territory  of  Chicago. 
St.  Louis,  particularly,  cast  envious  eyes  upon  the  great  trunk 
lines  radiating  from  Chicago  and  making  Illinois,  Iowa,  Minnesota, 
and  finally  Nebraska,  the  Dakotas  and  all  the  territory  west  of 
the  Rocky  Mountains  tributary  to  this  city.  In  June,  1867,  St. 
Louis  people  awoke  to  the  fact  that  their  trade  was  slipping  from 
them.  They  complained  that  there  were  six  trunk  lines  through 
Iowa,  all  leading  to  Chicago,  and  not  one  to  St.  Louis.  To  remedy 
this  a  line  was  proposed  to  run  north  and  south,  cutting  these  trunk 
lines  and  diverting  business  to  St.  Louis.  This  line  was  built  at 
a  latter  date,  but  at  no  time  did  it  seriously  conflict  with  Chicago 
trade.  St.  Louis  also  complained  that  Chicago  "drummers"  were 
to  be  found  infesting  every  town  and  hamlet  of  the  West.  A 
notable  victory  was  won  by  Chicago  during  this  year,  a  victory 
which  gave  it  a  world-wide  reputation,  for  at  the  Paris  Exposition 
Chicago  packing  products  were  awarded  the  first  prizes,  making 
almost  a  clean  sweep  in  that  department  in  competition  with  all 
other  packing  centers  of  America  and  Europe. 

Prices  in  1867  improved  slightly  at  the  opening  of  the  year, 
notwithstanding  the  usual  January  tightness  of  the  money  market. 
Instead  of  getting  better,  however,  conditions  grew  worse  and  the 
"Express"  of  January  16th  said  that  the  business  of  the  city  was  at 
low  ebb,  that  lower  prices  were  looked  for  and  that  merchants 
were  not  stocking  up.  Towards  the  end  of  the  month  gold  went 
up  suddenly  and  briefly,  bringing  a  temporary  raise  in  prices,  but 
money  was  scarce  and  only  to  be  obtained  at  2  and  2^  per  cent 
a  month.  This,  obviously,  put  a  damper  on  speculation.  The  clear- 
ing house  of  the  Chicago  banks  reported  the  clearings  for  the  week 
of  January  30th  as  two  million  dollars  below  that  of  the  week 
preceding  and  there  was  a  period  of  business  depression,  and  it  was 
said  that  times  would  not  look  up  until  there  was  action  as  to  the 
tariiT  and  as  to  internal  revenue.  In  May  it  was  reported  that 
there  were  many  idle  ships,  although  the  rate  to  Buffalo,  on  wheat, 


[1867]  OF  THE  CITY  OF  CHICAGO  357 

was  but  4  to  4j4  cents  per  bushel.  Large  ships  were  unable  to 
obtain  cargoes  and  it  was  thought  that  too  many  boats  were  being 
built.  Owing  to  scarcity,  high  prices  prevailed  in  the  grain  and 
produce  markets,  but  business  was  dull  owing  to  the  poverty  of 
the  people.  In  June  there  was  a  sensational  fall  in  prices;  wheat 
and  the  other  cereals  were  all  affected.  There  were  several  fail- 
vires,  notable  among  which  was  that  of  Wm.  R.  Stone.  No.  2  corn 
fell  to  76  cents  and  wheat,  which  had  long  been  above  $2,  reached 
$1.60  on  June  19th,  but  as  the  stock  was  nearly  exhausted,  No.  2 
spring  wheat  advanced  again  to  $2  June  28th  and  fell  to  $1.70  July 
1st.  There  were  wild  fluctuations  during  July,  as  the  stock  was  so 
small  that  it  was  easily  manipulated.  July  12th  No.  2  spring  wheat 
for  August  delivery  sold  at  $1.50,  although  spot  wheat  did  not  sell 
below  $1.55  during  August,  but  the  first  week  in  September  it  was 
about  $1.65.  During  the  first  week  in  October  it  reached  $1.98, 
with  No.  1  spring  wheat  at  $2.02  and  No.  3  at  $1.90.  No.  2  spring 
wheat  declined  again  to  $1.80  October  23rd  and  to  $1.68  November 
12th,  but  recovered  and  was  quoted  at  $1.90  on  December  30th. 
In  spite  of  the  gradual  retirement  of  the  greenbacks,  the  currency 
was  expanding.  From  June  10,  1865,  to  April  1,  1867,  national  bank 
currency  increased  $161,094,119,  while  legal  tender  notes  were 
retired  to  the  amount  of  $155,920,592,  leaving  a  net  gain  of  $5,173,- 
527.  This  may  have  had  some  effect  upon  the  markets,  for,  by  July, 
money  was  quoted  as  "easy."  Corn  was  the  object  of  great  specu- 
lation. May  1st  it  was  held  at  $1.09@1.10  for  No.  1,  and  by  June 
11th  it  had  fallen  to  78^.  A  grand  conspiracy  was  charged.  It 
was  said  that  operators  in  Liverpool,  New  York  and  Chicago  had 
combined,  first  to  raise  prices  and  then  to  depress  them. 

The  following  gives  a  general  idea  of  the  course  of  the  mar- 
kets according  to  the  report  of  the  Secretary  of  the  Board  covering 
the  period  from  April  1,  1867,  to  March  31,  1868. 

Wheat — The  crop  was  not  so  large  as  expected,  but  the  quality 
was  excellent.  Large  quantities  were  shipped  to  Ohio,  Indiana  and 
Pennsylvania,  where  it  was  said  the  wheat  crop  was  gradually 
dying  out.  The  first  week  in  April,  1867,  No.  1  spring  wheat  sold 
at  $2.57@2.90  and  No.  2  at  $2.20@2.43^.  A  high  point  was  reached 
in  May,  when  No.  2  sold  at  $2.85,  one  of  the  highest  points  ever 
reached  in  the  American  wheat  market.  The  price  ranged  as  high 
as  $2  for  No.  1  spring  until  the  end  of  July,  falling  with  the  coming 
in  of  the  new  crop  and  reaching  the  low  point  of  the  year  the  last 
of  August,  when  No.  2  sold  for  $1.55.  The  two  dollar  mark  for 
No.  2  spring  was  again  reached  the  first  of  January,  1868,  and  the 
price  remained  slightly  over  that  figure  most  of  the  time  until  the 
last  of  March,  the  fiscal  year  closing  at  $1.90@1.95  for  No.  2. 

Corn — The  decrease  in  the  amount  of  corn  was  startling,  re- 
ceipts being  more  than  eight  million  bushels  less  than  in  the  pre- 
ceding year.     The  falling  off  was  attributed  to  the  partial  crop 


358  HISTORY  OF  THE  BOARD  OF  TRADE  [1867] 

failure  of  1866  in  consequence  of  early  frosts  and  heavy  rains  in 
the  fall  of  that  year.  Neither  was  the  crop  of  1867  as  large  as 
expected  owing  to  spring  floods  which  washed  out  much  of  the 
seed  already  planted.  The  later  months  of  1867  were  more  favora- 
ble, frosts  were  late  and  the  quality  of  the  corn  was  excellent.  In 
April,  1867,  No.  1  corn  was  quoted  94i^@1.05  and  No.  2  at  85@95. 
No.  2  exceeded  $1  in  price  the  first  of  May  and  then  dropped,  reach- 
ing 79@8iy2  about  July  20th.  It  reached  $1  again  about  September 
7th  and  remained  at  or  above  this  point  until  the  new  crop  began 
to  come  in  in  November,  after  which  it  steadily  declined,  reaching 
a  low  point  of  77^@79  in  February  and  closing  the  fiscal  year  at 
83}i.  New  corn  was  first  quoted  November  23  at  78@84i/2  and 
showed  little  variation  up  to  April,  1868,  ending  the  year  at 
81@84. 

Oats — The  increase  in  the  movement  of  oats  was  in  marked 
contrast  to  that  of  corn,  showing  a  gain  of  almost  two  million 
bushels  over  the  preceding  year  in  receipts,  and  three-quarters  of 
a  million  in  shipments.  The  crop  was  not  only  large  but  of  excel- 
lent quality.  The  price  in  the  week  ending  April  6,  1867,  was 
48@57  for  No.  2,  and  this  increased  steadily  until  May  29,  when 
the  high  point  of  the  year  was  reached  at  90  cents  as  the  result  of 
a  corner.  But  this  was  but  temporary  and  the  quotation  of  the 
week  ending  June  8th  was  55@70.  The  price  lowered,  reaching 
40  cents  the  last  of  August.  The  crop  of  1867  was  of  such  good 
quality  that  there  was  no  quotable  difference  between  No.  1  and 
No.  2  for  the  remainder  of  the  year.  The  price  reached  60  cents 
in  November  and  until  March  31,  1868,  fluctuated  between  52  and 
62j4,  the  latter  price  being  quoted  in  the  middle  of  January.  The 
Board's  fiscal  year  closed  with  the  price  57  cents. 

Rye — The  quality  of  the  rye  crop  was  excellent,  but  the  quan- 
tity was  deficient.  The  high  price  of  wheat  caused  rye  to  be  in 
demand  for  milling  and  when  the  crop  shortage  became  known 
there  was  a  sharp  upturn  in  price.  The  receipts  were  nearly 
500,000  bushels  less  than  in  the  preceding  year.  The  price  of  No. 
1  rye  the  first  week  in  April,  1867,  was  $1.30@1.48.  During  April 
and  May  it  rose  to  $1.57.  In  June  there  was  a  sharp  decline  to  95 
cents,  but  there  was  a  steady  recovery  to  $1.06  before  the  end  of 
the  month.  It  touched  $1.25  in  July,  $1.35  in  October,  and  the  price 
rose  from  $1.33@1.36  in.  the  week  ending  November  30th  to  $1.58, 
during  the  week  ending  December  14th.  There  was  little  varia- 
tion until  March,  when  it  touched  $1.67,  closing  the  fiscal  year  under 
a  reaction  at  $1.55@1.60. 

Barley — The  cultivation  of  this  cereal  was  encouraged  by  the 
high  prices  of  the  preceding  year  and  the  acreage  was  large.  In 
the  East  the  crop  was  comparatively  a  failure,  but  the-  West,  aided 
by  favorable  weather,  produced  a  large  crop  of  bright  barley  of 
excellent  quality.     Prices  throughout  the  year  were  remunerative 


[1867]  OF  THE  CITY  OF  CHICAGO  3S9 

and  the  movement  was  large  both  in  and  out.  A  few  cargoes  of 
Canadian  barley  were  imported  for  the  manufacture  of  pale  ale, 
but  consumption  was  largely  confined  to  the  domestic  crop.  There 
was  an  increase  in  receipts  of  nearly  500,000  bushels  over  1866-7, 
and  in  shipments  of  more  than  350,000  bushels.  There  was  little 
No.  1  barley  on  the  market  and  most  of  the  crop  was  graded  No.  2 
and  rejected.  In  April,  1867,  the  price  of  No.  2  barley  was  88  cents 
@$1.09,  and  it  remained  above  one  dollar  until  about  the  1st  of 
May.  The  last  of  the  old  crop  sold  in  July  at  55@60  cents,  and 
the  new  crop  opened  in  August  at  72@90  cents.  It  soon  exceeded 
$1  in  value  and  ranged  up  to  $1.23j/2  in  October.  There  was  some 
decline  from  these  figures,  but  about  the  middle  of  November  there 
was  a  sudden  rise,  quotations  for  the  last  week  of  the  month  being 
as  high  as  $1.50.  From  this  time  the  price  constantly  advanced, 
reaching  $2  before  the  close  of  January,  and  increasing  with  each 
quotation  until,  the  last  of  March,  1868,  it  reached  $2.55. 

Receipts  and  shipments  of  wheat,  corn,  oats,  rye  and  barley 
for  the  fiscal  year  ending  March  31,  1868,  as  reported  by  the  Sec- 
retary of  the  Board  of  Trade: 

Receipts         Shipments 

Wheat,  bushels 13,483,261         10,050,451 

Corn,  bushels 25,223,468        21,880,682 

Oats,  bushels 12,659,645         10,309,063 

Rye,  bushels    1,276,614  1,130,782 

Barley,  bushels  2,300,178  1,755,583 

Provisions — The  high  price  of  corn  discouraged  feeding  and 
while  the  number  of  hogs  slaughtered  was  160,000  more  than  in 
the  preceding  year,  the  weight  did  not  increase  in  proportion,  as 
many  hogs  were  marketed  in  poor  condition.  For  the  first  time  in 
Chicago's  history  the  number  of  hogs  shipped  exceeded  one  mil- 
lion, the  number  being  1,033,118,  and  at  the  same  time  the  number 
packed  increased  to  796,225,  being  the  largest  pack  since  the  season 
of  1863-4.  Early  in  the  year  the  crop  shortage  became  apparent 
and  the  product  became  subject  to  a  brisk  speculative  demand  which 
sent  prices  up.  The  receipts  for  the  year  were  1,833,373,  including 
both  live  and  dressed.  Live  hogs  opened  in  April  at  $6.75@7..50, 
but  remained  below  that  point  from  then  until  December  14.  The 
price  again  remained  nearly  stationary  at  this  figure  until  February, 
during  which  month  the  top  price  was  constantly  above  $8.  In 
March  the  $9  point  was  reached  and  the  high  price  of  the  year  was 
recorded  in  the  week  ending  March  14,  at  $10  for  choice  hogs.  The 
year  closed  at  $7@9.50,  according  to  quality.  Mess  pork  was  rela- 
tively high,  but  comparatively  steady  all  through  the  year.  The 
low  price  was  reached  in  November  at  S19.25@  19.50,  and  the  highest 
price  was  the  last  of  February  at  $23.50(a^24.  The  year  opened  in 
April  at  $22.50@22.75  and  closed  March,  1868,  at  $23.50@24. 


360  HISTORY  OF  THE  BOARD  OF  TRADE  [1868] 

Cattle — While  the  receipts  and  shipments  showed  a  decided 
decrease  as  compared  with  the  preceding  year,  the  beef  packing 
business  increased  by  more  than  8,000  head.  The  receipts  were 
313,797  and  the  shipments  203,564.  The  number  packed  was  35,346. 
Cragin  &  Co.  were  the  largest  packers  of  beef,  killing  8,510  head. 
A.  E.  Kent  &  Co.  and  Culbertson,  Blair  &  Co.  each  packed  over 
7,000  head.  Early  in  April,  1867,  the  price  of  beef  cattle  was  $5.25@ 
8,  and  the  price  advanced  until  June  1st,  when  it  reached  $6.50@ 
10.10.  The  price  remained  relatively  high  during  most  of  June, 
but  in  July  it  fell  to  $3.75@7.25,  and  the  best  cattle  did  not  reach 
$8  again  until  the  middle  of  January,  1868,  after  which  there  was 
a  steady  gain  and  the  year  closed  at  $4.50@9.50. 

^  Transportation — Railroad  freight  rates  were  low  in  April, 
1867,  being  50  cents  per  hundred  on  grain  to  New  York ;  after  Jvme 
1st,  however,  they  ranged  from  70  to  85  cents  per  hundred  for  the 
remainder  of  the  year.  Lake  rates  on  corn  to  Buffalo  ranged  from 
7^  cents  in  April  to  23^  cents  in  August  and  10  cents  in  December. 
Propeller  rates  on  corn  to  Buffalo  showed  a  wide  range.  In  April 
the  rate  was  8  cents,  in  June  2^/^  cents,  in  July  4@4y^  cents,  in 
August  2y2  cents  to  10  cents,  falling  to  Gyi  cents  in  September  and 
reaching  the  high  level  the  second  week  in  November  at  13  cents, 

^the  last  quotations  being  8  cents. 

1868 

With  New  Year's  Day  of  1868  came  the  usual  flood  of  good 
resolutions  and  high  hopes.  Markets  were  high  and  business  was 
good,  but  there  were  many  grave  questions  before  the  people  and 
the  business  world  sought  to  help  solve  them.  The  Boston  Board 
of  Trade  called  a  convention  to  be  held  on  February  5,  to  which  rep- 
resentatives from  all  similar  bodies  were  invited.  The  Chicago 
Board  of  Trade  sent  delegates,  and  the  subjects  to  be  discussed 
were  currency,  transportation,  the  depressed  condition  of  ocean 
commerce,  uniform  measurement  of  grain  and  a  national  chamber 
of  commerce. 

Nothing  tells  better  the  story  of  Chicago's  growth  than  the 
following,  which  appeared  in  the  Chicago  "Republican"  in  January, 
1868: 

"When  the  Chamber  of  Commerce  was  built  in  1865  it  was 
the  work  of  a  few  men  to  defend  the  scheme  against  the  timid  con- 
victions of  others,  that  the  structure  would  be  too  large  and  utterly 
a  failure  as  an  investment.  It  was  to  be  placed  where  it  would 
require  twenty  years  to  build  up  a  business  neighborhood  about  it. 
Today  the  great  hall  is  often  overcrowded  at  'Change  hours  with  its 
regular  frequenters ;  the  stock  of  the  building  association  is  a  solid 
and  profitable  one,  and  the  costly  structures  of  LaSalle  street, 
present  and  projected,  set  the  question  of  a  business  neighborhood 
sufficiently  at  rest." 


[1868]  OF  THE  CITY  OF  CHICAGO  361 

Among  the  Chicago  men  to  hold  places  on  important  commit- 
tees at  the  Boston  convention  were :  I.  Y.  Munn,  "order  of  busi- 
ness;" J.  P.  Lawrence,  "weights  and  measures;"  John  C.  Dore, 
"transportation;"  B.  F.  Culver,  "foreign  commerce;"  Mr.  Law, 
"national  chamber  of  commerce;"  R.  McChesney,  "currency  and 
finance;"  E.  W.  Blatchford,  "agricultural  and  manufacturing  inter- 
ests;" Murry  Nelson,  "taxation."  At  the  Boston  banquet  E.  W. 
Blatchford  responded  to  the  toast,  "The  Cities  of  the  Great  West." 
This  convention  was  wide  in  its  scope  and  had  great  influence  as 
the  voice  of  the  prominent  business  men  of  the  country.  In  its  reso- 
lutions it  declared  as  follows :  That  it  is  the  duty  of  the  nation 
to  develop  its  resources  and  thus  increase  the  basis  for  taxation; 
that  the  increase  in  transportation  facilities  between  the  seaboard, 
the  Mississippi  and  the  Pacific,  insures  the  perpetuity  of  the  Union ; 
that  Congress  should  aid  in  the  building  of  a  ship  canal,  for  ships 
of  1,000  tons,  from  the  lakes  to  the  Mississippi;  that  it  should 
improve  inland  rivers ;  that  it  should  push  the  Union  Pacific  and 
other  central  lines ;  that  measures  should  be  taken  for  greater  safety 
for  travel,  both  by  rail  and  on  ships ;  that  Congress  should  regulate 
the  construction  of  railroad  bridges,  improve  tidewater  facilities, 
build  the  Niagara  canal  as  a  commercial  necessity  and  use  economy, 
appropriating  only  for  works  begun.  The  Committee  on  Finance 
and  Taxation  recommended  7  per  cent  as  the  legal  rate  of  interest 
and  urged  that  written  contracts  be  legalized  to  be  made  payable 
in  gold  or  coin.  These  reports  were  printed  and  widely  circulated, 
and  the  Chicago  delegates  returning  announced  themselves  as  much 
pleased  with  the  convention. 

An  event  of  interest  to  many  Board  members  in  January,  1868, 
was  the  burning  of  "Farwell  Hall,"  the  $200,000  Y.  M.  C.  A.  build- 
ing. This  aroused  people  to  the  danger  of  fire  and  the  inflammable 
nature  of  the  buildings  of  that  day,  and  the  Board  was  reminded 
that  but  a  short  time  previously  the  Chamber  of  Commerce  build- 
ing would  have  met  the  same  fate  through  a  fire  which  started  from 
the  defective  hot  air  furnace  had  the  Board  not  been  in  session 
and  promptly  resolved  itself  into  an  amateur  fire  company  and 
extinguished  the  flames. 

There  was  something  of  a  sensation  on  'Change  when,  in 
January,  Henry  Milward,  the  statistician  of  the  packing  interests, 
challenged  the  accuracy  of  the  figures  given  out,  officially,  by  the 
Board  of  Trade.  Speaking  of  the  statement  of  shipments  of  pro- 
visions from  Nov.  1,  1867,  to  Jan.  18,  1868,  he  declared  the  figures 
were  "outrageously  incorrect."  Later  he  made  public,  figures  show- 
ing the  supremacy  of  Chicago  over  its  old-time  packing  rival,  Cin- 
cinnati. 

Chicago  took  first  place  in  the  season  of  1861-2,  and  has  held 
it  since  that  time.  During  the  period  quoted,  Chicago's  packing 
business  had  increased  sixteen  fold,  while  the  business  of  Cincin- 


^^ 


^ 


362  HISTORY  OF  THE  BOARD  OF  TRADE  [1868] 

nati  had  decreased.  At  this  time  St.  Louis  stood  third  in  the  pack- 
ing business,  Milwaukee  fourth  and  Louisville  fifth. 

But  it  was  not  in  the  packing  business  alone  that  Chicago  was 
gaining;  it  was  in  general  business  also.  A  statement  was  pub- 
lished showing  the  volume  of  business  in  various  cities  of  the  cen- 
tral west.  The  figures  were:  Chicago,  $342,172,708;  St.  Louis, 
$213,034,958;  Buffalo,  $81,301,015;  Pittsburgh,  $80,409,595;  Detroit, 
$62,757,209;  Cleveland,  $55,142,882.  These  figures  covered  the 
volume  of  business  in  general  wholesale  and  retail  business,  liquors, 
auctioneers  and  commercial  brokers.  It  will  be  seen  that  Chicago 
had  a  greater  volume  of  business  than  the  last  four  named  cities 
combined. 

During  this  year  a  considerable  question  arose  between  ship- 
pers and  lake  carriers  as  to  the  responsibility  for  "shortage."  The 
fight  was  started  at  a  Cleveland  convention  of  vessel  owners,  and 
it  grew  to  serious  proportions,  threatening  to  tie  up  all  lake  traffic. 
It  was  claimed  by  vessel  owners  that  there  were  losses  for  which 
they  were  not  responsible  and  that  the  "shortages"  occurred  before 
grain  was  delivered  to  them.  The  elevator  men,  who  were  deeply 
interested,  held  a  meeting  in  the  Chamber  of  Commerce,  on  March 
30,  1868,  at  which,  after  setting  forth  that  the  contest  was  virtually 
one  between  the  vessel  owners  and  the  warehousemen,  resolved 
to  insert  the  following  clause  in  bills  of  lading  for  grain,  instead 
of  the  one  agreed  upon  at  a  former  meeting,  providing  the  Board 
of  Trade  should  sanction  it :  "All  the  deficiency  in  cargo  to  be 
paid  for  by  the  carrier  and  deducted  from  the  freight,  and  any 
excess  in  the  cargo  to  be  paid  for  to  the  carrier  by  the  consignee, 
In  case  grain  becomes  heated  while  in  transit  the  carrier  shall  deliver 
his  entire  cargo,  and  pay  only  for  any  deficiency  caused  by  heating 
exceeding  five  bushels  for  each  1,000  bushels."  A  committee  of 
five  was  appointed  to  get  the  names  of  vessel  owners  who  refused 
to  pay  shortage  or  who  had  brought  suit  to  recover  shortages 
deducted  from  freight,  and  to  make  public  their  names  and  the 
names  of  the  vessels,  also  to  find  how  many  vessels  had  been  "over" 
during  the  year  preceding  and  how  much,  and  also  to  learn  where 
the  vessels  loaded  and  discharged. 

At  the  annual  meeting  this  matter  was  brought  before  the 
board,  and  on  motion  of  Murry  Nelson  a  committee  of  fifteen  was 
appointed  to  consider  the  question  and  to  report  at  a  future  meet- 
ing. The  committee  was  to  consist  of  three  shippers,  three  elevator 
owners,  three  bankers,  three  carriers  and  three  grain  receivers, 
and  should  their  report  be  favorable  to  further  action  the  Board 
of  Directors  were  empowered  to  carry  out  their  suggestions.  At 
a  meeting  held  on  April  14,  the  committee  presented  majority  and 
minority  reports.  H.  K.  Elkins  and  R.  P.  Richards  signed  the 
minority  report  recommending  the  appointment  of  weighmasters 
for  the  purpose  named,  in  order  that  shippers  might  be  as  thor- 


[1868]  OF  THE  CITY  OF  CHICAGO  363 

oughly  protected  as  to  quantity,  as  they  were  under  the  system 
of  inspection,  as  to  quality.  B.  P.  Hutchinson,  Chas.  Randolph, 
C.  S.  Hutchins,  J.  W.  Preston,  S.  H.  McCrea,  Ira  Y.  Munn  and  T.  N. 
Bond  signed  the  majority  report,  which  stated  that  it  would  be 
unwise  for  the  Board  of  Trade  to  undertake  the  appointment  of 
weighers  of  grain  in  the  elevators  of  the  city,  but  urged  the  vessel 
owners  themselves  to  appoint  competent  weighers  for  each  elevator 
of  receipt  and  delivery,  who  should  thoroughly  understand  the  con- 
struction of  the  elevators  and  should  personally  attend  to  the  weigh- 
ing of  all  cargoes  received  or  delivered.  The  majority  report  also 
included  the  following  resolution  that  "If  any  elevators  in  the  city 
are  so  constructed  that  grain,  after  being  weighed  for  the  vessel, 
can,  by  any  possibility,  be  returned  to  the  house,  the  proprietors 
of  such  elevators  be  requested  to  so  alter  their  houses  in  this  regard, 
that  the  several  weighmen  may  know,  positively,  that  when  grain 
is  once  weighed  for  the  vessel  it  must  certainly  go  on  board."  The 
majority  report  as  outlined  above  was  adopted. 

At  this  time  Chicago,  in  spite  of  its  large  volume  of  business, 
was  not  a  full  port  of  entry,  and  duties  on  imported  goods  had  to 
be  paid  at  Port  Huron  or  Detroit,  or  at  the  seaboard  where  they 
entered  the  United  States.  This  was  a  great  inconvenience  to 
Chicago  business  men,  and  the  Board  of  Trade  joined  in  the  effort 
to  have  a  genuine  custom  house  established  and  goods  forwarded 
in  bond  without  examination  or  appraisal.  A  bill  to  that  effect  was 
introduced  in  Congress,  but  it  was  several  years  before  the  rights 
of  Chicago  were  acknowledged. 

During  the  month  of  April  the  Board  of  Trade  was  scandal- 
ized, and  its  reputation  unjustly  injured  among  shippers,  by  the 
failure  of  the  commission  firm  of  Lindell  &  Teed.  This  firm  adver- 
tised extensively,  offered  cut  rates  and  finally  offered  free  storage 
for  produce  entrusted  to  them.  The  doors  of  this  establishment 
were  suddenly  closed  and  many  shippers  were  left  to  mourn  the 
loss  of  the  dear  departed.  The  assets  were  found  to  amount  to 
$600,  while  the  liabilities  ran  into  the  thousands.  While  in  nowise 
responsible,  the  Board  of  Trade,  as  with  every  institution,  had  to 
suffer  for  this  misdeed  of  some  of  its  members. 

Not  directly  connected  with  the  Board  of  Trade,  but  as  giving 
an  interesting  sidelight  on  the  growth  of  Chicago,  it  is  noteworthy 
that  in  this  year  State  street  first  came  into  prominence  as  a  retail 
street,  and  it  was  predicted  by  the  knowing  ones,  although  denied 
by  other  wiseacres,  that  State  street  would  be  the  leading  retail 
street  some  day.  Another  matter  worthy  of  mention  as  showing 
Chicago's  growing  importance  is  the  government  report  of  incomes 
over  $10,000.  It  was  stated  that  those  having  incomes  over  this 
amount  were  in  St.  Louis  126,  in  Cincinnati  220  and  in  Chicago  302. 
The  earlier  criticism  of  the  reports  of  the  Board  of  Trade  voiced  by 
Mr.    Milward   was   echoed    and   emphasized   by    the    "Commercial 


364  HISTORY  OF  THE  BOARD  OF  TRADE  [1868] 

Express"  under  the  date  of  May  14,  at  which  time  that  paper  said : 
"A  large  number  of  the  Board  of  Trade  are  constantly,  and  greatly, 
dissatisfied  with  the  mariner  in  which  the  Board  of  Trade  statistics 
are  collected,  arranged  and  posted,  with  their  incompleteness,  incor- 
rectness and  irregularity.  The  preparation  of  comprehensive, 
accurate  and  reliable  statistics,  such  as  should  be  furnished  to  the 
Board  of  Trade,  involves  an  amount  of  labor  which  the  present 
secretary  has  either  not  the  ability  or  not  the  inclination  to  per- 
form, and  at  the  present  rate  of  discontent  the  matter  of  the  duties 
of  a  secretary  will  be  likely  to  form  an  issue  in  the  next  annual  elec- 
tion." The  "Express"  continued,  declaring  that  the  Secretary  was 
unpopular  and  inefficient,  and  in  a  later  issue  the  employment  of 
a  statistician  was  urged. 
y  In  May,  1868,  there  arose  a  matter  in  which  the  Board  was 

vitally  interested.  The  Chicago  &  Alton  Railroad  sent  the  follow- 
ing notice  to  its  agents:  "On  and  after  May  11,  and  until  further 
notice,  grain  may  be  consigned  to  the  National  Elevator  of  Chicago, 
if  shippers  so  order,  at  an  added  charge  of  $5  per  car,  for  delivery 
of  cars  at  elevator.  On  all  grain  so  consigned  agents  will  add  $5  per 
car  to  our  charges  on  the  way  bill.  All  unconsigned  bulk  grain 
will  be  delivered  to  the  Union  elevator,  as  heretofore.  Please  notify 
shippers.  T.  B.  Blackstone,  President  and  General  Superintendent ; 
James  Smith,  General  Freight  Agent."  The  shippers  were  notified 
and  they  sent  a  protest  to  the  Board  of  Trade  against  the  very 
evident  discrimination.  Upon  receipt  of  this  protest  the  Directors 
took  immediate  action  and  the  following  resolutions  were  read  on 
'Change  and  met  with  the  hearty  approval  of  the  members : 

"Whereas,  The  Chicago,  Alton  &  St.  Louis  Railroad  has  issued 
the  above  order,  therefore, 

"Resolved,  That  we  consider  the  same  an  unfair  and  unjust 
discrimination  in  favor  of  one  elevator  to  the  prejudice  of  another 
and  contrary  to  law  and  all  the  business  interests  of  this  city,  cal- 
culated to  concentrate  and  confine  the  business  of  elevating  and 
storing  grain  in  a  few  hands  to  the  exclusion  of  fair  and  honorable 
competition,  to  which  we  can  with  most  safety  look  for  a  correction 
of  the  many  complaints  arising  under  the  existing  association  or 
combination  of  elevator  interests,  and  we  recommend  to  the  mem- 
bers of  the  Board  of  Trade  that  they  unite  with  the  people  along 
the  line  of  said  railroad  to  resist  the  collection  of  the  extra  charge 
for  switching,  and  to  determine  the  rights  of  shippers  and  receivers 
of  grain  under  the  law." 

Still  another  matter  of  concern  connected  with  the  railroad 
conditions  was  the  action  of  the  Chicago  &  Northwestern  in  what 
was  considered  an  attempt  to  discriminate  against  Chicago  in  favor 
of  Milwaukee.  There  was  a  change  in  the  presidency  of  the  road 
and  the  new  official  was  said  to  be  a  partisan  of  Milwaukee,  and 
determined  to  build  up  that  city  at  the  expense  of  Chicago.    In  this 


[1868]  OF  THE  CITY  OF  CHICAGO  36S 

emergency   the    Board   met   and   the   following   resolutions    were 
adopted  on  'Change : 

"Whereas,  It  is  being  currently  rumored  in  well-informed  cir- 
cles that  the  Northwestern  Railroad  Company  is  about  to  abandon 
its  well  matured  project  of  extending  its  line  of  road  from  Madison, 
Wis.,  to  Winona,  Minn.,  connecting  at  Winona  with  the  Winona 
&  St.  Peter  and  the  projected  Chicago  &  St.  Paul  roads,  thereby 
forming  a  key  to  the  trade  of  a  very  large  and  extensive  section  of 
country ;  and, 

"Whereas,  Such  abandonment  will  not  only  deprive  the  great 
State  of  Minnesota  of  a  direct  rail  communication  with  this  city, 
but  will,  for  a  long  time  to  come,  compel  the  products  and  traffic  to 
seek  this  city  through  circuitous  channels  as  at  present ;  therefore 
be  it 

"Resolved,  That  in  the  opinion  of  this  Board  the  best  interests 
of  one  of  the  largest  grain  growing  States  of  the  Northwest,  no  less 
than  the  best  interests  of  the  Northwestern  Railroad  itself,  together 
with  those  of  this  city,  demand  the  immediate  and  speedy  construe-^/ 
tion  of  this  very  important  railroad  connection." 

Some  of  the  trials  and  tribulations  which  confronted  the  Board 
in  the  early  days  will  be  appreciated  from  a  reading  of  the  follow- 
ing resolution  adopted  by  the  Directors  on  March  26,  1868: 

"Whereas,  This  Board  has  from  time  to  time  been  deprived 
of  its  regular  market  report  from  New  York,  through  the  neglect, 
designed  or  otherwise,  of  the  officials  of  the  Western  Union  Tele- 
graph Company,  while  this  same  company  have  never  failed  to  sup- 
ply a  private  telegram,  of  which  they  are  the  proprietors,  to  the 
detriment  of  public  business  and  in  violation  of  their  own  rules,  in 
giving  preference  to  their  own  dispatches ;  therefore, 

"Resolved,  That  this  Board  will  hail  with  gratitude  any  relief 
from  the  present  mismanagement  and  monopoly  of  the  Western 
Union  Telegraph  Company,  and  to  this  end  would  extend  a  hearty 
welcome  and  support  to  the  Pacific  &  Atlantic  Telegraph  Company, 
which  we  understand  is  about  to  extend  its  line  from  Cincinnati." 

The  annual  meeting  of  the  Board  occurred  on  April  6,  1868. 
The  officers  elected  were:  E.  V.  Robbins,  President;  E.  K.  Bruce, 
First  Vice-President;  J.  D.  Cole,  Jr.,  Second  Vice-President.  The 
new  directors  were  J.  W.  Preston,  L.  D.  Norton,  D.  W.  Irwin, 
Geo.  J.  Brine  and  Levi  Higgins.  John  F.  Beaty  was  again  Secre- 
tary and  George  F.  Rumsey,  Treasurer.  At  this  meeting  it  was  also 
decided  to  adopt  the  cental  system,  the  date  set  being  Aug.  1,  1868. 
As  on  the  former  occasion  when  this  system  was  adopted,  no  real 
effort  was  made  to  put  it  into  force  and  no  further  attempt  was 
made. 

The  report  of  the  Directors,  as  submitted  by  W.  M.  Egan,  Presi- 
dent, gave  the  financial  status  as  follows:  Receipts,  $102,260.18, 
including  upwards  of  $49,000  from  grain  inspection  and  $42,000  from 
assessments.    The  expense  of  inspection  exceeded  $42,000  and  cash 


366  HISTORY  OF  THE  BOARD  OF  TRADE  [1868J 

on  hand  amounted  to  $15,285.48.  The  membership  was  1,224,  being- 
an  increase  of  twenty-three  over  the  previous  year.  The  Directors 
deemed  it  prudent  to  lower  the  yearly  assessment  from  thirty-five 
to  thirty  dollars.  After  announcing  that  there  had  been  very  few 
complaints  in  regard  to  inspection,  the  most  serious  coming  from 
New  York,  and  that  no  claims  had  been  made  except  from  con- 
signees after  the  property  had  reached  its  destination,  the  report 
proceeded : 

"Your  Directors  have  carefully  investigated  such  claims  and 
almost  unanimously  decided  against  them  ;  and  to  guard  against 
such  cases  thereafter  they  ordered  the  chief  inspector  to  have  the 
following  clause  printed  in  the  certificate  of  inspection :  'No  claims 
for  damage,  arising  from  wrong  inspection  of  grain  will  be  enter- 
tained by  the  Board,  unless  made  before  the  vessel  or  car  on  which 
it  is  loaded  leaves  this  port,  and  the  matter  is  fully  investigated  by 
the  chief  inspector  or  by  the  Grain  Inspection  Committee.' 

"We  would  earnestly  recommend  that  no  further  alteration  be 
made  in  the  rules  of  inspection  of  wheat.  Heretofore  it  has  been 
customary  to  make  frequent  changes  in  the  inspection,  which  we 
believe  to  be  wrong  in  theory.  The  grades  should  be  permanent, 
and  the  crops  should  come  up  to  the  requirements  rather  than 
reduce  the  inspection  to  meet  a  bad  crop.  As  frequent  changes 
tend  to  injure  our  market  by  leading  foreign  wheat  buyers  astray 
in  purchasing  by  inspection  which,  when  once  established  on  as 
good  a  standard  as  now,  should  be  permanent." 

The  annual  report  contained  the  usual  trade  statistics,  and  the 
opinion  of  the  Supreme  Court  of  Illinois  in  the  case  against  the 
Board  by  James  P.  Page.  It  appears  that,  to  quote  from  the  opinion, 
"on  May  14,  1867,  Page  sold  to  Stevers  and  Brown,  also  members 
of  the  Board  of  Trade,  a  quantity  of  corn,  deliverable  at  any  time 
thereafter  during  the  month ;  that  on  the  21st  of  May,  corn  hav- 
ing advanced  in  price,  he  offered  to  pay  the  purchasers  $500  to 
rescind  the  contract ;  that  they  accepted  his  oflfer  and  on  the  same 
day  he  paid  them  $100  in  money  and  executed  to  them  his  promis- 
sory note  for  $400,  payable  on  demand;  that  Page,  failing  to  pay 
when  requested,  Stevers  and  Brown  made  a  complaint  to  the  Board 
of  Directors;  that  Page  appeared  and  admitted  the  indebtedness, 
but  said  he  was  unable  to  pay,  and  thereupon  the  Board  made  an 
order  in  accordance  with  the  fifth  by-law,  suspending  him  from  the 
privileges  of  the  Board." 

Page  brought  action  to  have  this  suspension  declared  illegal. 
The  Supreme  Court  sustained  the  Board  at  every  point.  In  part 
the  opinion  said : 

"One  of  the  objects  for  which  the  Board  of  Trade  was  created 
undoubtedly  was  to  promote  a  high  standard  of  commercial  honor 
and  commercial  credit  in  the  city  of  Chicago  by  securing  among  the 
members  of  the  Board  a  prompt  discharge  of  their  pecuniary  obliga- 
tions, contracted  in  their  dealings  with  each  other,  without  a  resort 


[1868]  OF  THE  CITY  OF  CHICAGO  367 

to  the  expensive  and  dilatory  procedure  of  a  court  of  law.  In  order 
to  accomplish  this  the  charter  authorizes  the  Board  to  create 
within  itself  tribunals  of  reference  and  arbitration,  by  whose  deci- 
sion the  members  shall  be  bound ;  but  it  does  not  confine  the  Board 
to  the  use  of  these  means  for  the  attainment  of  these  objects.  It 
expressly  gives  the  power  of  expulsion,  and  under  that  power  the 
corporation  has  adopted  this  by-law,  providing  that  if  a  member 
fails  to  comply  with  a  business  contract  made  with  another  mem- 
ber he  shall  be  expelled.  *  *  *  It  certainly  cannot  be  said  that 
this  rule  was  not  germane  to  the  purposes  for  which  the  corporation 
was  created.  In  our  judgment,  though  it  might  sometimes  operate 
harshly,  it  is  well  adapted  to  secure  the  object  we  have  above  named, 
and  preserve  the  high  character  and  credit  of  the  Board.  That  a 
corporation,  purely  commercial  in  its  character,  would  soon  cease  to 
be  respected  or  respectable,  if  it  tolerated  among  its  members  a 
violation  of  an  undisputed  contract,  is  a  proposition  too  plain  for 
argument." 

Page  also  set  up  that  the  transaction  was  in  violation  of  the 
Warehouse  Act,  forbidding  the  dealing  in  futures.  The  court 
declined  to  pass  on  the  validity  of  this  law,  saying: 

"The  record  shows  that  no  question  of  this  character  was  made 
before  the  Board  of  Directors,  when  the  matter  was  heard.  On  the 
contrary,  the  relator  distinctly  admitted  his  indebtedness,  and 
neither  averred,  nor  offered  to  prove  that  his  note  had  been  given 
in  settlement  of  a  contract  prohibited  by  the  act  in  question.  He 
cannot,  therefore,  now  complain  of  the  action  of  the  Board  as  viola- 
tive of  that  law,  or  ask  us  to  set  aside  their  action  on  that  ground. 
He  prays  a  mandamus,  because,  as  he  claims,  the  action  of  the  Board 
was  illegal.  In  deciding  whether  it  was  so  we  must  take  his  case 
as  he  made  it  before  the  Board.  In  this  view  it  is  unnecessary  to 
decide  on  the  constitutionality  of  the  law,  which  has  been  briefly 
argued  by  counsel  for  appellee.    The  judgment  must  be  affirmed." 

This  opinion  was  handed  down  by  Charles  B.  Lawrence,  Asso- 
ciate Justice,  and  confirmed  the  Board  in  its  all  important  right  to 
discipline  its  members,  even  to  the  point  of  expulsion. 

Another  matter  dealt  with  in  the  report  of  the  Secretary  was 
the  formation  of  the  National  Board  of  Trade.  This  was  the  out- 
growth of  meetings  at  Detroit  and  Boston  and  the  first  meeting  was 
held  at  Philadelphia  June  5,  1868.  The  Chicago  delegates  were 
W.  M.  Egan,  Charles  Randolph,  Ira  Y.  Munn  and  V.  A.  Turpin. 
W.  M.  Egan  was  selected  as  one  of  the  Vice-Presidents.  The  Phila- 
delphia meeting  adopted  a  constitution  and  by-laws.  The  cental 
system  was  discussed  and  its  adoption  urged.  The  preamble  to  the 
constitution  read  as  follows : 

"In  order  to  promote  the  efficiency  and  extend  the  usefulness 
of  the  various  Boards  of  Trade,  Chambers  of  Commerce  and  other 
chartered  bodies,  organized  for  general  commercial  purposes  in  the 
United  States ;  to  secure  unity  and  harmony  of  action  in  reference  to 


368  HISTORY  OF  THE  BOARD  OF  TRADE  [1868] 

commercial  usages,  customs  and  laws,  and  especially,  in  order  to  se- 
cure the  proper  consideration  of  questions  pertaining  to  the  financial, 
commercial  and  industrial  interests  of  the  country  at  large,  this  As- 
sociation on  this  fifth  day  of  June,  1868,  is  hereby  formed  by  dele- 
gates, now  in  session  in  the  city  of  Philadelphia,  representing  the 
following  named  commercial  organizations,  to  wit :  Albany  Board 
of  Trade,  Baltimore  Board  of  Trade,  Boston  Board  of  Trade,  Boston 
Corn  Exchange,  BuiYalo  Board  of  Trade,  Chicago  Board  of  Trade, 
Charleston  Board  of  Trade,  Cincinnati  Chamber  of  Commerce, 
Cleveland  Board  of  Trade,  Denver  Board  of  Trade,  Detroit  Board 
of  Trade,  Dubuque  Produce  Exchange,  Louisville  Board  of  Trade, 
Milwaukee  Chamber  of  Commerce,  Newark  Board  of  Trade,  New 
Orleans  Chamber  of  Commerce,  New  York  Chamber  of  Commerce, 
New  York  Produce  Exchange,  Oswego  Board  of  Trade,  Peoria 
Merchants'  Exchange,  Philadelphia  Board  of  Trade,  Philadelphia 
Commercial  Exchange,  Pittsburg  Board  of  Trade,  Portland  Board 
of  Trade,  Providence  Board  of  Trade,  Richmond  Chamber  of  Com- 
merce, St.  Louis  Board  of  Trade,  St.  Louis  Union  Merchants' 
Exchange,  St.  Paul  Chamber  of  Commerce,  Toledo  Board  of  Trade, 
Troy  Board  of  Trade,  Wilmington  Board  of  Trade.  Article  1,  sec- 
tion 1,  provides :  'The  association  shall  be  designated  and  known 
as  the  National  Board  of  Trade.'  Frederic  Fraley  of  Philadelphia 
was  elected  President. 

At  the  annual  meeting  of  the  Board  of  Trade  in  1868  an  amend- 
ment was  made  to  the  General  Rules  of  the  Board,  so  that  General 
Rule  5  should  read :  "The  Board  of  Directors  may  appoint  com- 
mittees to  such  services  as  will  in  their  opinion  best  subserve  the 
welfare  of  the  association,  and  committees  of  inspection  may  be 
selected  from  the  branches  of  trade  most  interested  whenever  such 
interests  are  not  fully  represented  in  the  Board  of  Directors ;  and, 
when  so  selected,  such  committee  to  be  fully  under  the  control  of 
the  Board  of  Directors,  as  if  appointed  from  their  own  number; 
and  they  may  enact  such  rules  for  their  own  purposes — not  con- 
trary to  the  charter  or  rules  of  the  association — as  will  best  secure 
the  interests  for  which  they  were  appointed." 

An  event,  in  July,  1868,  was  the  banquet  tendered  by  the  Board 
of  Trade  to  visiting  editors  from  Wisconsin  and  Minnesota.  This 
was  given  at  the  Sherman  House.  The  Board  seems  to  have  been 
unfortunate  in  its  social  afifairs  at  this  period ;  for  this  banquet,  like 
the  inaugural  banquet  of  1865,  was  the  subject  of  severe  criticism. 

The  case  of  Miller  vs.  Bruce,  involving  the  question  of  "privi- 
leges," was  one  which  created  much  feeling  among  Board  members, 
in  July,  1868.  This  case  against  Bruce,  who  was  the  First  Vice- 
President  of  the  Board,  was  first  brought  before  the  Directors. 
This  body  denied  jurisdiction  on  the  ground  that  the  sale  of  "privi- 
leges" was  not  a  recognized  transaction.  A  meeting  of  the  Board 
was  called  at  which  Miller  was  upheld  and  the  Directors  were  asked 
to  re-open  the  case  and  decide  it  on  its  merits.  On  again  coming 
before  the  Directors  there  was  a  tie  vote,  the  President,  upon  the 


[1868]  OF  THE  CITY  OF  CHICAGO  369 

advice  of  counsel,  casting  the  deciding  vote  in  favor  of  throwing 
the  case  out.  This  action  again  created  much  resentment,  and 
demand  was  made  that  the  rules  be  changed  so  as  to  recognize  the 
validity  of  transactions  in  "privileges." 

In  September,  1868,  the  commission  merchants  entered  pro- 
tests against  abuses  which  they  claimed  existed  in  the  inspection 
of  grain.  They  asked  that  samples  be  taken  and  held  for  two  days, 
upon  which  appeal  might  be  taken.  They  also  asked  for  a  weight 
standard  for  all  grades  and  demanded  better  weighing  facilities. 

In  December,  the  Board  rooms  were  the  scene  of  a  notable 
event  when  the  reunion  of  officers  of  the  Union  Army  ended  with 
a  banquet  tendered  them  by  the  Board  of  Trade.  On  the  committee 
were  Generals  F.  T.  Sherman,  A.  C.  McClurg  and  W.  E.  Strong, 
of  Chicago,  and  among  the  noted  guests  were  Generals  Grant,  Sher- 
man, Thomas,  Pope  and  others.  With  his  usual  taciturnity  and 
desire  to  avoid  publicity,  it  was  reported  that  General  Grant  "slipped 
out  early." 

There  are  some  other  things  for  which  the  year  1868  is  memor- 
able. The  Board  of  Trade  had  not  lost  its  patriotic  ardor,  and  at 
its  annual  meeting  the  sum  of  five  thousand  dollars  was  voted  to  be 
used  with  a  like  amount  to  be  subscribed  by  citizens  generally  for 
the  erection  of  a  soldiers'  monument  in  Rosehill  Cemetery.  J.  W. 
Preston,  George  Field  and  S.  H.  McCrea  were  appointed  as  a  com- 
mittee to  serve  without  compensation  to  superintend  the  erection. 

Diligent  research,  in  which  the  traffic  managers  of  various 
railroads  have  assisted,  brings  to  light  some  interesting  facts  con- 
cerning the  use  of  refrigerator  cars  about  this  time.  Mr.  P.  H. 
Monks  the  present  commercial  agent  for  the  Michigan  Central 
Railway,  contributes  the  following  for  the  benefit  of  this  history, 
giving  information  as  to  the  first  shipments  of  fresh  meats  under  ice 
via  the  Michigan  Central.     Mr.  Monks  says : 

"The  first  shipment  of  fresh  beef  that  I  can  find  was  made 
from  Detroit  in  1868,  to  Boston,  Massachusetts.  It  was  made  by  the 
G.  H.  Hammond  Company,  and  G.  H.  Hammond,  himself,  accom- 
panied this  shipment  to  Boston,  it  being  in  what  they  called  the 
'Davis  Patten  Refrigerator.'  After  that  Mr.  Hammond  located 
his  plant  at  Hammond,  Indiana,  and  was  shipping  from  there  about 
the  year  1874,  and,  in  1876,  had  quite  a  lot  of  business  moving  east, 
via  the  Michigan  Central." 

Mr.  W.  H.  Johnson,  Chicago  manager  of  the  Star  Union  Line, 
placed  the  first  shipments  of  fresh  beef  under  ice  on  that  line  at  an 
even  earlier  date.     Replying  to  an  inquiry  he  says : 

"We  have  gone  over  our  records  very  carefully,  and  regret  to 
state  that  the  exact  date  on  which  the  first  shipment  was  made  can- 
not be  ascertained.  However,  in  March,  1865,  the  Star  Union  Line 
constructed  the  first  refrigerator  cars  ever  built — 30  in  number — 
and  these  cars  were  immediately  thereafter  utilized  for  the  ship- 


370  HISTORY  OF  THE  BOARD  OF  TRADE  [1868] 

ment  of  butter,  eggs,  cheese,  dressed  poultry  and  fresh  meats  to 
eastern  markets.  These  cars  were  built  under  the  direction  of 
Mr.  W.  W.  Chandler,  formerly  General  Agent,  Star  Union  Line, 
Chicago,  and  the  following  extract  from  his  memoirs  may  prove 
interesting :  'I  had  never  seen  or  heard  of  a  "refrigerator  car"  at 
that  time,  nor  did  I  dignify  them  with  the  name  of  refrigerator  cars, 
but  christened  them  "ice  houses  on  wheels."  I  did  not  get  a  patent, 
but  later  sundry  other  people  did,  varying  the  construction  one  way 
and  another.  This,  to  the  best  of  my  knowledge  and  belief,  was  the 
beginning  of  what  is  now  an  immense  business.  The  several  fast 
freight  lines  running  eastward  from  Chicago  carry  an  average  of 
more  than  one  hundred  carloads  of  dressed  beef  daily,  protected 
by  refrigerators  not  only  to  the  seaboard  but  across  the  ocean,  a 
large  percentage  being  exported.  The  cars  carry  about  128  quarters 
each — the  meat  of  32  beeves — which  in  a  year  will  make  a  train 
more  than  two  hundred  miles  long,  each  two  rods  representing  32 
cattle.  To  supply  this  vast  number  "cattle  from  a  thousand  hills" 
would  soon  be  exhausted,  but  the  western  prairies  can  furnish  them 
easily.  Besides  dressed  beef  shipments,  the  refrigerator  cars  of 
the  several  lines  carry  in  the  aggregate  more  butter,  eggs,  cheese 
and  dressed  poultry  than  I  would  dare  to  state  lest  I  be  charged 
with  exaggeration.' " 

These  memoirs  were  written  a  number  of  years  ago,  and  the 
present  traffic  of  this  nature  greatly  exceeds  that  described  by  Mr. 
Chandler.  These  were  the  beginnings  of  the  great  fresh  meat  indus- 
try which  has  revolutionized  the  trade  of  the  United  States,  and 
which  has  practically  ended  local  butchering  in  the  eastern  States. 
Although,  as  already  stated,  a  freight  car  provided  with  refrigera- 
tion of  some  sort,  successfully  transported  poultry  and  mutton  from 
the  West  to  New  York  City  in  the  summer  of  1857.  Chicago 
packers  were  quick  to  follow  Mr.  Hammond's  example,  and  Chicago, 
about  1874,  started  on  its  career  as  the  chief  source  of  fresh  meat 
supplies  for  the  eastern  part  of  the  United  States,  as  it  had  been  for 
many  years  the  source  of  supply  of  cured  meats. 

Speaking  of  the  year  1868,  Andreas  in  his  admirable  History 
of  Chicago,  called  it  "the  year  of  corners,"  saying:  "There  was  a 
corner  a  month,  three  on  wheat,  two  on  corn,  one  on  oats,  one 
attempted  on  rye,  and  the  year  threatened  to  go  out  with  a  tre- 
mendous one  on  pork  products.  The  corner  in  No.  2  spring  wheat, 
which  succeeded  in  June,  started  at  $1.77  and  culminated  June  30 
at  $2.20.  The  price  in  New  York  at  the  time  was  $2.02,  and  the 
day  after  the  corner  the  Chicago  price  fell  to  $1.80,  and  the  second 
of  July  to  $1.75.  This  corner  created  much  discussion  as  to 
restrictive  rules,  and  the  agitation  was  brought  to  a  head  by  a  corner 
in  September  corn."  President  E.  V.  Robbins  was  one  of  the  vic- 
tims of  this  corner,  which  was  extended  by  the  manipulators  to 
contracts  for  "buyer  October,"  which  were  "called"  October  first. 
Being  unable  to  meet  his  obligations  Mr.  Robbins  tendered   his 


[1868]  OF  THE  CITY  OF  CHICAGO  371 

resignation  as  President  of  the  Board  on  the  second  of  October. 
The  Directors  refused  to  accept  this  resignation  and  passed  the 
following  resolution : 

"Whereas,  Mr.  E.  V.  Robbins,  the  President  of  the  Board  of 
Trade,  has  tendered  his  resignation,  assigning  as  a  reason  therefor 
the  recent  financial  difficulty;  therefore, 

"Resolved,  That  duly  appreciating  the  delicate  sense  of  pro- 
priety which  has  prompted  the  tendered  resignation,  and  entertain- 
ing for  Mr.  Robbins  sentiments  of  the  highest  respect  and  the  fullest 
confidence  in  his  business  integrity  and  ability,  we  deem  it  inex- 
pedient to  accept  his  resignation. 

"Resolved,  That  we  sincerely  sympathize  with  Mr.  Robbins 
in  his  business  embarrassment,  and  trust  his  well-known  character 
for  integrity  and  energy  will  soon  enable  him  to  relieve  himself  of 
what  he  considers  a  disqualification  for  holding  the  office  of  Presi- 
dent of  this  Board,  and  we  hereby  respectfully  urge  him  to  withdraw 
his  tendered  resignation." 

Following  this  action  on  the  part  of  the  Directors,  Mr.  Robbins 
withdrew  his  resignation  and  served  as  President  the  remainder  of 
his  term.  This  corner  proved  very  disastrous  to  many  influential 
men  on  'Change,  and,  on  Oct.  13,  1868,  the  Board  passed  the  fol- 
lowing resolution : 

"Resolved,  That  the  practice  of  'corners,'  of  making  contracts 
for  the  purchase  of  a  commodity,  and  then  taking  measures  to 
render  it  impossible  for  the  seller  to  fill  his  contract,  for  the  purpose 
of  extorting  money  from  him,  has  been  too  long  tolerated  by  this  and 
other  commercial  bodies  in  the  country  to  the  injury  and  discredit 
of  legitimate  commerce,  that  these  transactions  are  essentially 
improper  and  fraudulent,  and  should  any  member  of  this  board 
hereafter  engage  in  any  such  transactions,  the  Directors  should  take 
measures  for  his  expulsion,  under  the  provisions  of  Rule  5,  for  the 
prevention  of  improper  and  fraudulent  practices." 

The  price  of  corn  in  this  corner  was  forced  from  85  cents 
to  $1.15.  The  resolution  seems  to  have  had  little  effect  on  the  mem- 
bers, for  soon  after  there  was  another  corner  in  No.  1  corn.  Begin- 
ning on  November  6  at  77  cents  the  price  was  advanced  to  90  cents 
by  the  20th.  It  was  then  apparent  that  the  market  was  cornered 
and  that  the  corn  was  virtually  in  the  hands  of  one  firm  and  a  syn- 
dicate of  its  friends.  The  syndicate  ran  the  price  up  to  $1.08  on 
the  last  of  the  month.  The  price  in  New  York  on  that  day  was  $1.17 
and  on  the  next  day  it  fell  to  80  cents  in  Chicago.  Many  leading 
firms  of  undoubted  credit  and  untarnished  business  reputations 
were  caught  in  the  corner,  but,  contrary  to  expectations,  they 
refused  to  settle  their  deals  at  the  price  demanded.  Among  the 
firms  which  rebelled  against  this  extortion  were  Murry  Nelson  & 
Co.,  W.  H.  Lunt,  Eli  Johnson  &  Co.,  Spruance,  Preston  &  Co.,  and 
others.  It  was  determined  by  them  to  submit  a  test  case  to  the 
Board  of  Arbitrators,  depending  on  the  resolution  recently  passed 


372  HISTORY  OF  THE  BOARD  OF  TRADE  [1868] 

for  a  vindication.  The  case  was  brought  by  Priestley  &  Co.,  who 
had  engineered  the  corner,  against  Murry  Nelson  &  Co.  The  case 
as  presented  was  that  Murry  Nelson  &  Co.  sold,  on  the  16th  of 
November,  for  delivery  during  the  month  to  Priestley  &  Co.,  five 
thousand  bushels  of  No.  1  corn  at  78  cents  per  bushel,  deliverable 
in  November.  On  the  last  of  the  month  they  found  it  impossible 
to  purchase  said  corn,  except  from  Priestley  &  Co.  or  parties  acting 
with  them,  and  the  nominal  price  for  settlement  had  been  fixed  at 
$1.08  per  bushel.  Nelson  &  Co.  offered  to  settle  at  90  cents,  which 
was  refused,  and  the  dispute  was  brought  before  the  Board.  The 
Directors  investigated  the  facts,  and  reported  in  December,  exon- 
erating the  buyers,  and  saying  that  members  must  settle  within  ten 
days  or  be  suspended.  It  was  declared  that  the  Board  did  not  act 
to  save  men  from  paying  their  debts  and  that  the  "corner"  cry 
was  being  used  simply  to  shield  those  caught  by  a  rising  market. 
Murry  Nelson  &  Co.  and  the  others  were  obliged  to  settle  at  the 
syndicate  price. 

The  packing  season  of  1867-8  was  a  good  one,  and  by  the  end 
of  January  Chicago  was  elated  that  it  had  again  far  surpassed  Cin- 
cinnati, the  pack  at  that  time  reaching  732,000  and  the  Union  yards 
being  in  condition  to  handle  50,000  cattle  and  150,000  hogs  per 
week. 

The  price  of  wheat  steadily  declined  in  the  early  part  of  the 
year  and  this  continued  for  nearly  two  months.  The  "Express" 
of  March  5,  1868,  said :  "There  has  been  a  steady  decline  in  wheat 
for  40  or  50  days.  No  panic  or  break,  but  a  steady  fall  in  price." 
In  March  came  a  sudden  rally  and  there  was  great  excitement  in 
both  the  wheat  and  the  corn  pits.  The  advance  by  the  middle  of 
the  month  was  6@8  cents  in  wheat,  5@7  cents  in  corn,  2@3  cents 
in  oats,  3@5  cents  in  rye  and  3@4  cents  in  barley.  In  April  the 
chief  activity  centered  about  pork  products.  The  "Express"  of 
April  9,  1868,  said :  "The  recent  rapid  rise  in  the  prices  of  pork 
products  is  something  remarkable.  Fortunes  have  been  both  won 
and  lost.  The  advance  on  mess  pork  within  a  week  is  $3  per  barrel, 
and  on  lard  one  cent  per  pound.  On  some  days  three  to  five  million 
pounds  of  meats  have  changed  hands  here ;  on  others,  between 
7,000  and  8,000  barrels  of  pork  and  about  2,000  tierces  of  lard.  Of 
course  the  sellers  early  in  the  season  can  now  see  where  and  how 
they  lost  from  $20,000  to  $100,000,  which  others,  more  fortunate, 
have  gained."  By  the  end  of  April  there  had  been  an  advance  of 
40  per  cent  on  pork  products  since  the  close  of  the  packing  season 
and  wheat  was  up  25  cents  per  bushel.  The  advance  culminated 
about  the  10th  of  May,  and  No.  2  wheat  lost  from  11@12  cents 
within  a  week.  The  first  big  corner  of  the  year  was  in  June  wheat, 
No.  2  spring  being  the  contract  grade.  The  price  advanced  35  cents 
on  the  Chicago  market,  although  it  was  down  15  cents  in  Liver- 
pool and  New  York.     There  were  charges  of  a  widespread  con- 


[1868]  OF  THE  CITY  OF  CHICAGO  373 

spiracy,  embracing  the  three  cities,  but  the  "Express"  of  July  9 
states :  "The  indications  are  that  the  managers  of  the  wheat  corner 
will  lose  and  that  they  were  simply  catspaws,  transferring  money 
from  unfortunate  shorts  to  country  consignors  who  happened  to 
have  cash  wheat  on  hand  at  the  end  of  the  month."  The  "Express" 
also  resents  the  attacks  upon  the  Board  made  by  newspapers  and 
others,  speaking  of  them  as  "tirades  against  gambling,  in  which  they 
show  that  they  know  as  little  about  commerce  as  a  monkey  at  the 
masthead  knows  about  navigation." 

One  thing  which  helped  business  was  the  passage  of  a  law  by 
Congress  legalizing  transactions  on  a  gold  basis,  when  it  was  so 
specified  in  the  contract.  Prior  to  this  time  contracts  for  payment 
in  gold  were  not  legal.  Chicago  dealers  came  to  realize,  however, 
that  they  were  paying  too  much  for  grain,  based  on  the  price  in  New 
York  and  the  cost  of  transportation.  Freight  rates  to  New  York, 
including  elevating,  insurance  and  other  charges  at  that  time  were: 
wheat,  35>4  cents ;  corn,  30  cents,  and  oats,  24  cents  per  bushel.  At 
the  same  time  (in  September,  1868)  the  differences  in  prices  between 
New  York  and  Chicago  were:  wheat,  28  cents;  corn,  24@25  cents; 
oats,  20  cents.  It  was  argued  that  the  dealers  were  losing  this 
difference,  and  that  while  it  attracted  large  shipments  to  the  Chicago 
markets,  the  dealers  could  not  afford  it.  By  October  1  wheat  had 
fallen  an  additional  10@12  cents.  The  corner  in  corn,  already 
noted,  in  which  the  President  of  the  Board  was  a  victim,  came  at 
the  end  of  September,  1868.  On  September  26  No.  1  corn  was  90 
cents,  on  the  30th  it  reached  $1.15,  and  in  two  days  it  had  fallen  to 
SSyi,  this  corner  in  corn  forcing  prices  up  25  cents  a  bushel  within 
a  week,  while  wheat  declined  10@15  cents,  was  disastrous  to  those 
speculators  who  were  bulls  on  wheat  and  bears  on  corn. 

There  was  an  exciting  scene  on  'Change,  Oct.  13,  1868.  New 
York  dispatches  were  unaccountably  delayed,  the  only  dispatches 
being  private  ones  known  as  the  "Morse  dispatches."  Mr.  Morse 
took  this  occasion  to  extol  the  merits  of  his  dispatches  on  the  floor 
of  the  Exchange.  He  was  accused  of  speculating  on  the  advance 
information  which  he  received.  He  denied  this  vehemently,  and 
then  a  broker  stepped  forward  and  declared  that  he  had  speculated 
for  Morse  and  knew  about  his  transactions.  The  scene  on  'Change 
was  an  angry  one  and  made  the  members  all  the  more  dissatisfied 
with  the  telegraph  service. 

The  market  continued  to  decline  through  October.  No.  2 
spring  wheat  was  doWn  to  $1.10@1.15,  which  was  only  82@85  cents 
in  gold,  and  the  farmers  throughout  the  West  began  to  withhold 
shipments  on  account  of  the  low  prices,  many  settling  balances  in 
currency  rather  than  to  sacrifice  the  grain. 

In  November,  1868,  the  "Open  Board"  elected  officers,  as  fol- 
lows: President,  Thos.  Whitney;  Vice-President,  F.  M.  Mitchell; 
Secretary  and  Treasurer,  Capt.   Chas.   Cooley;  Directors,   W.   N. 


374  HISTORY  OF  THE  BOARD  OF  TRADE  [1868] 

Brainard,  D.  C.  Scranton  and  F.  C.  Whitmarsh.  The  "Open  Board" 
had  collected  $1,900,  of  which  $1,400  had  been  used  for  expenses, 
and  it  was  voted  to  donate  $500  to  charity.  It  was  proposed  to 
build  an  "Arcade"  in  the  middle  of  the  block  partially  occupied  by 
the  Chamber  of  Commerce. 

The  November  corner  in  corn  has  already  been  mentioned. 
After  this  corner  the  course  of  wheat  was  upward  and  of  corn 
downward,  but  with  the  close  of  the  year  came  a  tightness  of  the 
money  market,  which  affected  nearly  all  prices,  the  exception  being 
pork  products,  which  took  a  sharp  turn  upward,  mess  pork  advanc- 
ing $5@6  per  barrel  and  lard  3@4  cents  per  pound.  The  scarcity 
of  money  increased  as  the  end  of  the  year  approached;  prices  were 
lower  and  a  loan  could  only  be  obtained  from  1  to  3  per  cent  per 
month.  Chicago  as  a  whole  was  prosperous  throughout  the  year; 
real  estate  transactions  in  May,  1868,  averaged  $1,000,000  per  week 
and  real  estate  values  in  some  localities  doubled  during  the  year. 

It  was  not  until  the  following  years  that  the  annual  reports 
of  the  Board  were  made  to  conform  to  the  calendar  year,  and  the 
figures  quoted  below  from  the  official  report  of  the  Secretary  cover 
the  year  from  April  1,  1868,  to  March  31,  1869.  Shipments  for  the 
year  were:  Flour  and  wheat,  24,945,187  bushels;  corn,  25,404,275 
bushels;  oats,  15,018,312  bushels;  rye,  1,463,708  bushels;  barley, 
1,065,278  bushels;  total,  67,896,760  bushels.  Receipts— Flour,  bar- 
rels, 2,276,335;  wheat,  15,318,148  bushels;  corn,  25,174,470  bushels; 
oats,  16,168,301  bushels;  rye,  1,549,701  bushels;  barley,  1,893,641 
bushels. 

Wheat — In  the  week  ending  April  4,  1868,  wheat  was  quoted 
at  $2.02>4@2.05  for  No.  1  spring,  reached  $2.15@2.21  in  May; 
declined  steadily,  each  quotation  being  lower  than  the  week  before, 
until  it  reached  $1.80  at  $1.86  in  July.  There  was  a  brief  rally 
sending  the  price  to  $1.95@2.  This  was  but  a  temporary  gain  and 
from  then  on  the  wheat  market  was  one  of  falling  prices ;  in  the 
week  ending  September  26th,  it  was  $1.48@1.58;  the  week  ending 
October  24th,  $1.23@1.42;  the  week  ending  November  14th, 
$1.15>4@1.19;  the  fiscal  year  closing  at  $1.14@1.18.  The  June 
corner  in  No.  2  spring  wheat,  in  which  the  price  of  that  grain  was 
forced  up  to  $2.20  while  similar  wheat  of  better  quality  was  35@40 
cents  lower,  was  a  peculiarly  vicious  one. 

Corn — In  the  first  week  of  the  fiscal  year  corn  was  81@86j4 
cents.  It  climbed  steadily  until  May,  when  it  reached  99  cents, 
receded  gradually  the  next  six  weeks,  a  low  point  being  touched 
in  the  latter  part  of  June,  at  83^  cents.  There  was  then  an  upward 
tendency,  the  price  rising  until  it  culminated  at  Sl.OSyi  early  in 
August.  It  remained  around  the  dollar  mark  throughout  August, 
but  in  September  it  fell,  reaching  89J/2  cents,  only  to  rally,  under 
the  influence  of  the  corner,  to  $1.15  at  the  end  of  the  month.  This 
was  followed  by  a  decline  of  about  40  cents,  the  price  during  the 


[1868]  OF  THE  CITY  OF  CHICAGO  375 

week  ending  October  31st  being  as  low  as  75  cents.  After  this 
there  was  a  rally  ending  in  the  corner  of  November,  the  top  price 
for  the  week  ending  November  2Sth  being  $1.08.  In  December 
the  price  declined  to  65  cents,  and  it  remained  close  to  this  point 
the  remainder  of  the  fiscal  year,  the  last  quotation,  February  13, 
1869,  being  66@67  cents.  New  corn  opened  in  November  at  48 
cents  and  rose  gradually  until  February,  when  it  reached  59  cents. 
The  last  week  of  the  fiscal  year  the  range  was  53^@563^  cents. 

Oats — This  cereal  sold  during  the  first  week  in  April,  1868,  at 
57@59^  cents,  this  quotation  being  on  No.  1.  It  advanced  until 
about  the  middle  of  May,  when  the  price  was  74  cents,  but  from 
this  high  point  it  declined  and  by  the  last  week  in  August  had 
reached  50J4  cents.  The  new  crop  graded  No.  2  or  lower,  and 
opened  in  the  third  week  of  August  at  50@52  cents.  During  the 
entire  season  the  top  price  was  56  cents  and  the  low  41 J^  cents. 
The  low  point  was  reached  the  last  week  in  October,  and  the  high 
point  in  March,  1869.  In  the  last  week  of  the  fiscal  year  the  price 
was  52@54>4  cents.  After  August,  1868,  the  few  cars  of  No.  1 
that  were  received  were  classed  with  No.  2  and  sold  at  the  same 
price. 

Rye — The  movement  in  rye  showed  a  large  increase  over  the 
preceding  year,  but  was  not  equal  to  that  of  the  year  1866-67. 
The  market  ruled  steady  all  through  the  year  under  a  constant 
but  quiet  demand,  and  prices  were  good  as  compared  to  the  low 
prices  of  other  cereals.  The  quality  of  the  crop  of  1868  was  uni- 
formly good,  and  the  yield  was  a  fair  one.  The  milling  demand  fell 
off  somewhat,  as  compared  with  1867-68,  but  this  was  offset  by 
increased  use  on  the  part  of  distillers  after  the  duty  on  spirits  was 
reduced.  The  first  week  in  April,  1868,  No.  1  rye  sold  at  $1.59@ 
1.60,  and  near  the  close  of  the  month  had  reached  $1.90.  It  receded 
in  June  to  $1.48;  rose  again,  in  the  week  ending  July  4th,  to  $1.70. 
There  was  a  rapid  fall,  however,  to  $1.12  before  July  25,  another 
advance  to  $1.44  in  August,  and  then  a  declining  market  with  only 
moderate  reactions.  A  low  point  was  reached  early  in  November 
at  $1.01,  after  which  the  market  recovered  to  $1.23  in  February, 
and  the  price  ranged  in  the  week  ending  March  27,  1869,  at  $1.18@ 
1.21. 

Barley — The  movement  in  barley  fell  off  from  the  preceding 
year,  both  in  receipts  and  shipments.  The  crop  of  1867  was  ex- 
hausted long  before  that  of  1868  came  in,  and  the  latter  being  but 
an  average  one  was  in  good  demand.  Considerable  barley  was 
shipped  to  Ohio,  but  very  little  to  the  seaboard ;  receipts  from 
Canada  were  120,000  bushels,  also  34,392  bushels  of  barley  malt. 
As  the  amount  in  store  was  light,  prices  fluctuated  rather  extensively 
with  the  varying  demands.  The  price  the  first  week  in  April  was 
$2.25@2.40  for  No.  2;  in  May,  $2.27@2.50;  July,  $1.20@1.60;  Octo- 
ber, $1.64@1.93,  after  which  prices  fell  off,  touching  $1.39  in  Novem- 


2,76  HISTORY  OF  THE  BOARD  OF  TRADE  [1868] 

ber,  advancing  again  to  $1.96  in  February.    The  week  ending  March 
27,  1869,  the  range  was  $1.65@1.72. 

Hogs— Receipts,  1,938,596;  shipments,  1,214,400;  packed,  617,- 
954.  The  following  is  the  statement  of  the  Secretary  as  to  the 
market  for  the  year:  "Chicago  still  maintains  the  lead  in  provi- 
sions, though  the  year  ending  March  31,  1869,  shows  a  material 
falling  off  in  pork  packing,  but  less  in  the  movement  of  hogs,  as  a 
great  many  animals  were  shipped  east  for  summer  packing  on  the 
seaboard.  It  was  early  apparent  that  the  crop  of  1868  would  not 
equal  that  of  1867,  though  the  average  weight  and  yield  of  lard 
were  better,  while  it  was  known  there  was  no  surplus  of  products 
on  hand.  Hence  prices  rapidly  ran  up  on  hogs  and  products, 
quotations  nearly  touching  the  top  figures  attained  in  our  packing 
annals,  under  an  active  consumptive  demand  from  the  South  for 
half-cured  meats,  followed  by  a  strong  speculative  inquiry.  Our 
exports  to  Europe  have  been  large  and  the  stock  remaining  on 
hand  at  the  close  of  the  fiscal  year  is  very  light." 

The  market  for  live  hogs  opened  in  April,  1868,  at  $7.40@9.75. 
Through  April  and  May  the  top  price  was  not  lower  than  $9.25. 
During  June  and  July  $8  was  low  and  $9.35  high  for  the  top  price. 
In  August  it  went  to  $10,  where  it  remained  nearly  stationary  for 
two  months.  October  saw  a  sharp  reduction,  the  price  going  from 
$9.50,  the  first  of  the  month,  to  $7.75  at  the  close. ;  $7.50  to  $8  were 
the  top  prices  during  November  and  the  first  half  of  December. 
During  the  latter  part  of  December  hogs  passed  the  $10  line,  reached 
the  $11  mark  in  January,  1869,  and  touched  the  top  at  $12.25  early 
in  February.  From  then  on  the  course  was  downward  and  the  price 
in  the  week  ending  March  27,  1869,  was  $11  for  choice  hogs. 

Mess  pork  was  high  all  through  the  year.  Opening  at  $24@25 
in  April,  it  rose  gradually  to  $30  about  the  middle  of  October.  The 
low  point  was  reached  about  the  end  of  November  at  $22,  after 
which  there  was  a  quick  rally,  the  top  being  reached  in  February, 
1869,  at  $33.25.  The  market  declined  the  remainder  of  the  year, 
being  quoted  the  last  week  in  March,  1869,  at  $30.50@31.25.  Lard 
followed  rather  closely  the  price  of  mess  pork.  It  opened  at  15^@ 
16  cents.  The  low  point  was  in  November,  at  13^  cents,  and  the 
high  was  in  January  at  20j4  cents.  March  found  it  at  18@18j4 
cents. 

Beef  Cattle — The  year's  business  showed  a  moderate  increase 
over  the  preceding  year,  although  not  over  1866-67.  The  receipts 
were  347,244  head,  the  shipments  235,531.  The  movement  was 
moderately  interfered  with  by  the  Texas  cattle  fever,  and  the  ex- 
citement which  prevailed  in  relation  thereto.  The  pack  was  26,950 
head,  a  decrease  of  8,400  from  the  previous  year.  The  falling  off 
was  largely  due  to  the  low  prices  ruling  in  the  East  for  beef 
products  which  promised  no  margin  of  profits  to  the  packers.  The 
following  are  high  and  low  prices  for  cattle  during  the  fiscal  year. 


[1869]  OF  THE  CITY  OF  CHICAGO  377 

which  show  the  trend  of  the  market.  April  1,  1868,  $3.50@8.75; 
May,  $3.50@9.25;  June,  $3@8.75;  August,  $2.25@7.50;  January, 
1869,  $3@8.00;  March,  $3@8.35. 

High  Wines — Owing  largely  to  the  reduction  in  the  internal 
revenue  tax,  the  manufacture  of  high  wines  increased  largely.  The 
amount  manufactured  in  Chicago  and  Cook  County  for  1868-69  was 
3,438,454  gallons,  nearly  2,000,000  gallons  more  than  during  the  year 
preceding. 

Transportation  rates  had  a  wide  range  during  the  year.  The 
rate  on  corn  per  bushel,  by  lake  to  Buffalo,  is  quoted  as  representa- 
tive of  other  lake  rates.  The  season  opened  in  April  with  a  rate 
of  11  cents,  in  May  it  was  4  cents,  June  Syi  cents,  August  3@5 
cents,  September  8  cents,  October  9yi  cents,  November  10  cents. 
By  rail  the  rate  on  fourth  class  merchandise  to  New  York  is  the 
one  here  quoted.  In  April  it  was  65c ;  May,  60c ;  from  June  until 
August  31st,  55  cents ;  September,  70  cents ;  January,  1869,  75  cents ; 
March,  1869,  50  cents. 

The  rail  and  lake  rates  followed  the  lake  rates  closely  during 
the  season,  starting  high,  lowering  during  the  summer  months  and 
rising  as  the  close  of  navigation  drew  near.  For  the  sake  of  com- 
parison, rates  on  flour  per  barrel  to  New  York  are  given  by  lake 
and  rail,  and  by  all  rail,  during  the  navigation  season  of  1868.  Lake 
and  rail,  April,  95  cents ;  May,  June,  July,  85  cents ;  August,  90 
cents;  September,  $1.15;  October,  $1.10;  November  $1.20.  All 
rail,  April,  May,  $1.20;  June,  July,  August,  $1.10;  September,  Octo- 
ber, November,  $1.40.  The  total  clearances  from  the  port  of  Chi- 
cago during  this  year  was  13,225,  with  a  tonnage  of  3,020,812  tons.  . 

/  1869 

The  signs  at  the  beginning  of  the  year  1869  were  not  por- 
tentous. Money  ruled  easier,  prices  were  better,  wheat  was  up. 
Corn  stood  at  62@65  cents.  Pork  products  stood  up  during  turn 
of  the  year  in  what  was  considered  to  be  the  "trial  week" 
which  should  determine  the  future  of  the  market.  The  new  corn 
crop  was  not  up  to  grade  and  the  directors  ordered  that  it  should 
be  separated  into  "New  Corn,"  which  should  be  stored  at  the  regu- 
lar winter  rates,  and  "No  Grade,"  which  should  pay  storage  at  the 
rate  of  2  cents  for  the  first  five  days  and  1  cent  for  each  additional 
five  days.  A  number  of  failures  were  recorded  at  New  York,  but 
these  were  set  down  to  the  extravagance  of  the  parties  involved. 
Chicago  had  been  fortunate  in  the  matter  of  failures  during  the 
year  preceding.  The  figures  of  failures  for  1868  were:  New  York, 
295 ;  Philadelphia,  63  ;  Boston,  59 ;  Baltimore,  37 ;  Chicago,  28.  A 
total  in  the  five  cities  of  482. 

The  Board  of  Trade  itself  was  bothered  as  to  what  to  do  with 
its  surplus.  In  the  transportation  world  there  had  been  great 
improvement.      The   western    lines    had    shown    much    prosperity. 


378  HISTORY  OF  THE  BOARD  OF  TRADE  [1869] 

The  earnings  of  fifteen  western  roads  were  $76,143,220  for  1868, 
against  $71,444,045  in  1867.  Many  new  lines  were  being  built,  and 
in  the  far  East  the  Suez  Canal  was  expected  to  be  opened,  while  to 
the  west  the  last  spikes  were  to  be  riveted  to  unite  Atlantic  and 
Pacific  shores  in  bonds  of  steel.  At  Chicago  two  new  packing 
houses  were  added,  those  of  Botsford,  Pope  &  Co.  and  H.  O.  Armour 
&  Co.  The  Supreme  Court  had  decided  that  the  law  legalizing 
contracts  payable  in  coin  was  constitutional.  With  such  a  setting 
it  is  no  wonder  that  few  realized  what  the  year  was  to  bring  forth. 

With  the  Board  of  Trade,  the  first  sensation  was  the  resignation 
of  John  F.  Beaty,  who  for  six  years  had  been  Secretary  of  the  Asso- 
ciation. This  came  in  March.  Mr.  Beaty  stated  that  he  wished  to 
retire  as  he  had  accepted  a  more  lucrative  position,  but  that  he 
would  remain  to  complete  the  report  for  the  year  or  to  assist  his 
successor.  The  directors  accepted  the  resignation  and  passed  highly 
eulogistic  resolutions  concerning  Mr.  Beaty  and  his  work.  Joel 
Henry  Wells,  a  member  of  the  Exchange  and  editor  of  the  "Com- 
mercial Express,"  had  heard  of  this  resignation  some  time  before 
it  was  sent  to  the  Board,  and  two  weeks  prior  to  its  receipt  had 
made  application  for  the  place.  Coming  as  it  did  soon  before  the 
annual  elections,  many  thought  the  selection  should  be  held  over 
to  await  the  action  of  the  new  officers.  This  was  not  done,  how- 
ever, and  the  choice  fell  upon  Charles  Randolph.  The  files  of  the 
"Express"  are  the  only  ones  of  a  trade  paper  available  for  this  period 
of  the  Board's  history,  and  it  is  only  fair  to  state  that  some  of  the 
later  criticisms  which  that  paper  made  of  the  management  may 
have  been  prompted,  to  a  degree,  by  the  disappointment  of  the 
editor  in  not  receiving  this  Secretaryship. 

It  was  felt  by  many  that  the  Arbitration  Committee  in  some 
cases  was  too  "arbitrary,"  and  this  feeling  prompted  a  resolution, 
passed  by  the  Board  March  9,  1869,  to  this  effect : 

Whereas,  It  is  believed  by  some  of  the  members  of  the  Board 
of  Trade  that  some  of  the  rules  heretofore  adopted  for  the  govern- 
ment of  the  Arbitration  Commhtee  are  inconsistent  with  other  rules 
so  adopted  and  are  in  conflict  with  the  charter  of  the  Board,  and 
with  the  laws  of  the  State  ;  therefore, 

Resolved,  That  Wm.  H.  Low,  Julian  S.  Rumsey,  N.  K.  Fair- 
bank  and  R.  McChesney,  be  and  are  hereby,  appointed  a  committee 
to  revise  the  general  rules  and  by-laws  now  in  force  and  submit  such 
amendments  thereto  as  to  their  judgments  may  seem  best. 

Resolved,  That  said  committee  be,  and  are  hereby,  requested 
to  submit  their  report  for  the  action  of  the  Board  at  the  earliest  day 
practicable — not  later  than  ten  days  before  the  approaching  annual 
meeting  of  the  Board. 

In  March,  1869,  the  Chicago  Board  of  Trade  was  visited  by  a 
delegation  from  New  York  dealers  relative  to  reforms  in  the 
methods  of  grain  shipments.     This  delegation  was  specifically  dis- 


[1869]  OF  THE  CITY  OF  CHICAGO  379 

avowed  by  the  New  York  Produce  Exchange  in  a  formal  resolution, 
a  copy  of  which  was  forwarded  to  Chicago ;  so  that  the  delegation 
had  no  standing  save  as  individuals.  Instead  of  diminishing  their 
influence,  however,  this  resolution  seems  to  have  heightened  their 
welcome,  as  it  was  felt  by  Chicago  members  that  the  reforms  they 
advocated  were  for  the  good  of  the  trade  and  that  the  New  York 
Exchange  had  acted  selfishly.  This  delegation  first  visited  Buffalo, 
where  they  received  warm  support  and  their  plan  was  adopted. 
Coming  to  Chicago  they  consulted  for  several  days  with  the  Com- 
mercial Committee  of  the  Board,  with  the  result  that  N.  K.  Fair- 
bank,  chairman  of  the  committee,  reported  the  following,  which 
was  adopted : 

"In  accordance  with  a  resolution  of  the  Commercial  Committee 
of  the  Board  of  Trade  passed  yesterday  (March  18)  appointing  a 
committee  to  draft  resolutions  in  reference  to  changes  proposed 
by  a  committee  from  the  New  York  Elevating  and  Warehouse  Asso- 
ciation, in  the  system  of  consignment  and  sale  of  western  produce 
in  the  city  of  New  York,  the  committee  begs  leave  to  report  the 
following  preamble  and  resolutions  : 

"Whereas,  The  following  preamble  and  resolutions  of  the 
Buflfalo  Board  of  Trade  in  reference  to  the  subject  before  us  meets 
with  our  hearty  approval ;  and 

"Whereas,  Our  co-operation  was  asked  by  said  resolution, 
which  was  as  follows :  'Whereas,  The  system  and  mode  of  con- 
signment and  sale  of  western  products  sent  forward  to  eastern  mar- 
kets has  been  injudicious  and  unprofitable,  rendering  a  radical 
change  important  and  imperatively  necessary,  whereby  greater 
dispatch  in  the  discharge  of  cargoes  may  be  attained,  as  well  as 
prompt  payment  on  the  sale  of  said  cargoes,'  and 

"Whereas,  A  proposition  has  been  submitted  to  us  by  a  com- 
mittee representing  the  Elevating  and  Warehouse  interests  of  the 
city  of  New  York,  looking  to  the  regulation  of  canal  bills  of  lading 
in  such  manner  that  boats  shall  go  to  store  with  cargoes  on  the  day 
of  their  arrival,  and  on  the  part  of  said  warehousemen,  promising 
in  furtherance  of  that  object,  to  reduce  the  rates  of  elevating  and 
storage,  one-half  the  price  now  charged  for  the  first  ten  days ;  be 
it  therefore 

"Resolved,  That  this  Board  of  Trade  hails  with  pleasure  the 
proposition  of  these  gentlemen,  showing  as  it  does  that  at  least  a 
portion  of  the  grain  men  of  New  York  have  awakened  to  the  neces- 
sity of  the  change  which  we  have  so  long  desired,  which  should  give 
us  more  prompt  and  reliable  returns  on  our  property  sent  for  sale  to 
that  market. 

"Resolved,  That  the  system  of  long  time  which  has  hereto- 
fore been  given  to  the  buyers  of  grain  in  New  York  is  ruinous  and 
unjust  to  the  consignor  and  consignee  of  grain  ;  that  grain  should 
be  sold  exclusively  for  cash  on  delivery. 

"Resolved,  That  this  Board  of  Trade  most  heartily  co-operate 
with  the  said  committee  in  their  efforts  to  bring  about  this  desirable 
change  and  that  on  our  part  we  are  ready  to  make  such  change 


380  HISTORY  OF  THE  BOARD  OF  TRADE  [1869} 

in  our  bills  of  lading  as  shall,  as  far  as  Buffalo  is  concerned,  eflfect 
the  desired  reformation. 

"Resolved,  That  we  invite  the  co-operation  of  our  western 
Boards  of  Trade  in  the  execution  of  this  system,  which  will  at  once, 
or  eventually,  abate  the  present  manner  of  consignment  and  sale  of 
products,  and  inaugurate  a  new  era  in  trade  with  the  city  of  New 
York  which  will,  in  the  opinion  of  the  Board,  be  mutually  beneficial 
to  all  concerned. 

"Resolved,  That  the  thanks  of  this  Board  of  Trade  be,  and  are 
hereby,  tendered  to  the  committee  for  the  able  and  impressive  man- 
ner with  which  they  have  presented  their  plan  to  this  Board.  There- 
fore, be  it 

"Resolved,  That  the  Board  of  Trade  of  the  city  of  Chicago 
recommend  such  change  in  bills  of  lading  at  Bufifalo  as  will  eflfect 
the  desired  reform  alone. 

"Resolved,  That  we  see  in  this  disposition  on  the  part  of  the 
more  liberal  and  enlightened  portion  of  the  trade  of  New  York  City 
a  willingness  to  conform  to  and  adopt  the  system  of  receiving, 
handling  and  selling  grain  which  has  so  successfully  prevailed  in 
the  western  grain  markets,  a  ready  solution  of  the  embarrassments 
and  losses  growing  out  of  the  pernicious  custom  of  selling  our  grain 
on  seven  or  ten  days'  time. 

"Resolved,  That  we  invite  the  hearty  co-operation  of  the  New 
York  Produce  Exchange  and  of  the  various  associations  of  the  West 
in  this  movement,  and  trust  that  they  will  support  the  Elevating 
and  Warehousing  Associations  in  carrying  out  so  desirable  a 
change." 

This  question  was  given  considerable  attention  at  Chicago, 
Bufifalo  and  New  York,  but  each  seemed  inclined  to  place  the  respon- 
sibility for  the  high  cost  of  handling  with  the  other  parties.  Chi- 
cago warehousemen  were  urged  to  reduce  charges  and  expedite 
business.  New  York  men  resolved  in  favor  of  bonds  for  the  improve- 
ment of  the  Erie  Canal,  and  that  the  cost  must  be  reduced  all  along 
the  line,  beginning  with  Chicago.  The  Bufifalo  "Commercial  Adver- 
tiser" urged  the  reduction  of  charges  at  Bufifalo,  as  the  percentage 
of  the  western  trade  held  by  that  city  was  decreasing.  The  Chicago 
Board  of  Trade  resolved  in  favor  of  a  reduction  of  canal  tolls  and 
urged  Bufifalo  to  reduce  its  charges.    The  resolutions  read : 

"Resolved,  That  disclaiming  any  intention  of  advising  our  Buf- 
falo friends  in  matters  pertaining  to  their  own  interests,  we  respect- 
fully suggest  a  material  abatement  in  their  charges  for  elevating, 
transference  and  storage  of  grain  and  insurance  on  the  same,  as 
well  as  a  reduction  in  the  charge,  termed  by  Buffalo  bankers 
'Exchange  of  /4@3^  per  cent,'  charged  whether  for  currency  paid 
over  their  counter  for  transportation  charges,  or  on  bills  on  New 
York,  would  attract  more  business  to  their  port  and  prevent  the 
growing  diversion  of  produce  to  other  routes  to  the  seaboard." 

The  New  Yorkers,  as  a  whole,  did  not  take  kindly  to  the  pro- 
posed reforms,  especially  to  cash  payments,  and  the  "Express"  of 


11869]  OF  THE  CITY  OF  CHICAGO  381 

April  28,  1869,  records  that  "New  York  grain  operators  are  trying 
to  prove  that  the  reform  recently  proposed — the  introduction  of 
the  cash  system  of  payment — will  enhance  the  expense  of  handling 
the  cereals  about  ly^  cents  per  bushel.  They  argue  that  the  move- 
ment on  the  part  of  the  reformers  is  simply  an  attempt  to  gain 
individual  prominence."  Little  came  out  of  all  this  agitation,  but 
it  continued  as  times  grew  harder.  A  "Cheap  Transportation"  con- 
vention was  held,  to  which  J.  C.  Dore,  N.  K.  Fairbank,  B.  P. 
Hutchinson  and  J.  M.  Richards  were  sent  as  delegates  by  the  Chi- 
cago Board.  This  convention  resolved  that,  owing  to  the  great 
decline  in  prices  of  products  during  the  past  year,  the  Northwest  / 

suffers  greatly,  a  reduction  of  rates  on  the  Erie  Canal  and  of  elevator 
charges  is  asked. 

The  annual  election  was  held  April  5,  1869.  J.  M.  Richards  was 
elected  President;  S.  H.  McCrea,  First  Vice-President;  Henry  A. 
Towner,  Second  Vice-President.  The  new  Directors  were  R.  Stone, 
C.  W.  Kreigh,  D.  H.  Lincoln,  R.  W.  Pettit  and  J.  K.  Fisher. 

At  the  annual  meeting  the  President  reported  a  surplus  of 
$15,000,  the  receipts  for  the  year  being  over  $110,000  and  the  mem- 
bership 1,287.  On  this  showing  the  membership  fee  was  reduced  to 
$25.  Inspectors  reported  inspection  of  113,663  cars  and  1,348  boat- 
loads of  grain.  By  action  of  the  Board  two  members  were  expelled 
from  the  association.  The  Board  asked  the  Directors  to  take  steps 
to  place  the  inspection  of  grain  upon  the  same  basis  as  that  of  flour 
and  provisions — independent  of  the  Board.  President  Richards, 
in  his  inaugural  interpreted  his  election  as  the  prevailing  of  a  good 
cause  and  a  decision  for  a  high  standard  of  commercial  honor,  the 
sacredness  of  contracts,  the  open  selection  of  officers  and  the  free 
discussion  of  all  questions. 

These  remarks  would  indicate  that  the  events  of  the  previous 
year  had  been  the  cause  of  considerable  dissension.  On  the  fol- 
lowing Monday  President  Richards  again  spoke,  at  this  time  urging 
cheap  transportation,  the  superiority  of  railroads  to  canals  and  free 
competition  in  the  handling  of  grain.  He  said  that  Chicago  was  to 
become  the  central  city  of  the  continent.  He  further  advised  the 
Board  to  own  the  building  which  it  occupied.  The  appointment  of 
Charles  Randolph  as  Secretary  was  ratified  by  his  continuance  in 
that  office,  and  L.  V.  Parsons  was  appointed  Treasurer.  The 
inspecting  force  was  not  changed.  At  this  meeting  revised  rules 
were  adopted  and  a  committee  was  appointed  to  co-operate  with 
the  Chamber  of  Commerce  and  citizens  generally  for  a  jubilee  when 
the  Pacific  road  was  opened.  A  motion  to  allow  members  to  be  rep- 
resented before  the  Arbitration  Committee  by  counsel  was  voted 
down.  The  Board  then  adjourned  to  the  Sherman  House,  where 
the  President  was  host  at  a  banquet  of  oysters  and  champagne. 

On  April  17  came  the  startling  intelligence  that  Packer,  Peck 
&  Co.,  a  New  York  commission  house,  had  defaulted  for  $160,000. 


382  HISTORY  OF  THE  BOARD  OF  TRADE  [1869] 

They  had  sold  grain  from  their  warehouse  to  this  amount.  It  was 
rumored  that  several  Chicago  firms  might  be  driven  to  suspend  on 
account  of  this  defalcation,  but  they  managed  to  weather  the  storm. 

The  millers  and  flour  dealers  also  had  their  troubles,  owing  to 
the  nature  of  the  crops,  and  at  a  meeting  held  in  April,  1869,  they 
resolved :  "That  it  is  the  opinion  of  this  meeting  that  an  establish- 
ment of  grades  and  the  selection  of  standards  of  'extra'  and  'super- 
fine' are  desirable,  and  that,  whenever  the  parties  to  a  trade  so  desire, 
flour  be  inspected  as  'sound,  full  weight,  and  equal  to  such  standard,' 
if  it  can  be  accomplished  without  interfering  with  the  present  gen- 
eral custom  of  inspection."  A  committee  of  five  was  appointed  to 
confer  with  the  Board  of  Trade  as  to  the  proposed  change. 

On  'Change  one  of  the  great  sensations  of  this  sensational  year 
came  the  latter  part  of  April,  when  it  was  announced  that  the  large 
quantity  of  new  corn  stored  in  the  Cjty  Elevator  was  "heating." 
Receipts  from  this  warehouse  at  once  became  unsalable  except  at 
a  discount  of  from  10(a)15  cents  per  bushel,  nor  did  the  trouble  end 
here,  for  every  corn  dealer  who  had  new  corn  to  deliver,  attempted 
to  buy  City  Elevator  receipts  at  a  low  price  and  compel  the  holder 
of  his  contract  to  accept  them,  and  the  purchasers,  not  being  inclined 
to  acquire  such  property  at  a  high  price,  resisted  to  the  last.  A 
meeting  of  the  Board  was  called  to  discuss  this  question,  and  con- 
cerning it  the  "Express"  said :  "So  many  doubts  arose  as  to  the 
legality  of  its  action,  and  so  much  dissatisfaction  at  the  ruling  of  its 
chairman,  that  a  second  meeting  was  called."  At  this  second  meet- 
ing, held  April  27,  1869,  the  Board  resolved  that  the  chief  grain 
inspector  should  keep  himeslf  acquainted  with  the  condition  of  all 
grain  in  all  the  elevators  and  post  on  the  Board  of  Trade  bulletin 
the  facts  as  to  any  grain  out  of  condition.  The  action  relative  to 
City  Elevator  receipts,  taken  at  the  previous  meeting,  was  rescinded, 
and  the  whole  matter  left  to  the  Committee  on  Arbitration. 

This  "hot  corn"  case  opened  up  anew  the  discussion  of  the 
whole  system  of  grain  inspection  and  grain  storage.  The  "Express" 
stated  that  it  "showed  in  bold  relief  the  evils  of  a  system  which  fixes 
no  special  responsibility  anywhere  for  results,  while  preserving  an 
absolutism  in  methods."  And  that  "the  owners  must  lose  10  or 
15  cents  per  bushel  on  account  of  a  fact  for  which  they  were  in  no 
way  responsible  and  had  no  power  to  prevent.  The  warehouse 
seems  to  furnish  only  a  wall,  a  roof  and  a  spout." 

The  Pacific  Railroad  was  completed  in  this  year.  By  the  latter 
part  of  April  it  was  announced  that  but  eight  hours  staging  were 
necessary  and  that  "Passengers  from  Chicago  to  San  Francisco 
reached  there  in  seven  and  one-half  days,  actual  traveling."  With 
the  completion  of  the  road  there  arose  much  difficulty  as  to  rates, 
as  the  California  end  of  the  line  demanded  10  cents  per  mile  and 
refused  to  prorate  with  any  other  road.  The  last  gold  and  silver 
spikes  were  driven  in  May,  1869,  and  San  Francisco  could  be  reached 


[1869]  OF  THE  CITY  OF  CHICAGO  383 

in  less  than  six  days.  The  fare  from  Chicago  was  $220.  Plans  for 
a  Chicago  jubilee  were  given  up,  but  President  Richards  repre- 
sented the  Chicago  Board  of  Trade  at  the  ceremony  when  the  lines 
were  joined,  and  spoke  for  the  Board  at  the  banquet  which  followed 
at  San  Francisco. 

In  May  the  "Open  Board"  again  elected  officers.  Thos.  Whit- 
ney, President;  H.  C.  Ranney,  Vice-President;  C.  G.  Cooley,  Secre- 
tary and  Treasurer,  and  J.  C.  Whitmarsh,  Wm.  N.  Brainard  and 
F.  M.  Mitchell  Directors.  The  receipts  were  $2,730,  from  273  firms. 
Five  hundred  dollars  was  given  to  the  poor  and  the  balance  used 
for  expense.  The  Open  Board  announced  that  it  would  erect  a  build- 
ing, 42x85,  on  a  lot  southeast  of  the  Chamber  of  Commerce  building. 

In  May  came  the  first  of  the  great  gold  panics  which  were  to 
make  the  year  memorable.  The  failure  of  the  banking  house  of 
Schepeler  &  Co.,  of  New  York,  caused  great  excitement  in  the 
"gold  room,"  and  the  premium  on  gold  rose  to  144J4,  the  highest 
point  it  had  reached  for  many  months.  As  usual  this  unsettled 
business  and  prices  in  all  lines. 

The  Chicago  Stock  Exchange  was  formed  in  1869.  The  incor- 
porators met  at  the  office  of  D.  H.  Denton,  18  Chamber  of  Commerce 
building,  on  April  27,  for  the  election  of  officers,  under  the  charter 
granted  April  19.  The  first  officers  were  :  President,  D.  H.  Denton  ; 
Vice-President,  Christian  Wahl ;  Secretary,  J.  J.  Richards ;  Treas- 
urer, Jas.  E.  Tyler.  Stock  subscription  books  for  $50,000  were 
opened  and  the  amount  soon  subscribed.  It  will  be  noted  that  sev- 
eral officers  of  the  New  Stock  Exchange  were  members  of  the  Board 
of  Trade. 

Soon  after  the  publication  of  the  eleventh  annual  report  of  the 
Board  of  Trade,  the  Boston  "Commercial  Bulletin"  had  the  follow- 
ing to  say  as  to  Chicago's  growing  importance,  especially  in  the 
field  covered  by  the  Board  : 

"Year  after  year  the  figures  that  represent  the  annual  com- 
merce of  Chicago  grow  bigger  and  bigger.  Nobody  but  a  Chicago 
man  could  cope  with  them  in  their  wild  state  and  reduce  them  to 
tabular  good  order.  In  looking  through  the  last  report  of  the 
Chicago  Board  of  Trade,  which  gives  the  results  of  the  business 
of  that  city  for  the  year  ending  March  31,  1869,  one  finds  it  hard  to 
believe  that  'figures  won't  lie.'  But  the  growth  of  the  city  in  popu- 
lation and  wealth,  the  far-reaching  expansion  of  its  commerce,  and 
its  rapid  advancement  along  all  the  lines  of  material  progress  fur- 
nish confirmation  strong  of  the  accuracy  of  the  figures.  No  abstract 
can  fairly  present  the  startling  facts  of  this  report.  *  *  *  Bas- 
ing her  claim  on  the  figures  Chicago  entitles  herself  'the  greatest 
grain,  provision  and  lumber  market  in  the  world.'  " 

There  was  a  corner  in  July  corn,  and  some  of  the  members 
applied  for  relief  under  the  rules  of  the  Board.  According  to  the 
"Commercial  Express"  of  July  20,  1869,  the  committee  reported 


384  HISTORY  OF  THE  BOARD  OF  TRADE  [1869] 

in  favor  of  the  settlement  of  July  contracts  for  No.  2  corn,  sellers' 
option,  at  78  cents,  and  at  80  cents  if  buyers'  option  all  July.  The 
■committee  decided  that  a  virtual  corner  had  been  created  by  the 
impossibility  of  sellers  procuring  enough  No.  2  in  good  condition 
to  fill  their  contracts.  The  following  is  the  "Rule  13"  under  which 
action  was  taken :  "Whenever  any  member  of  the  Board  of  Trade 
.shall  claim  that  the  fulfillment  of  his  contract  is  interfered  with  by 
the  existence  of  a  corner,  the  President  of  the  Board  shall,  upon 
the  application  of  any  party  to  such  contract,  appoint  a  committee 
of  three  disinterested  members  of  the  Board,  who  shall  decide  as  to 
the  existence  of  a  'corner,'  and  if  they  find  that  a  corner  existed  at 
the  time  of  the  maturity  of  the  contract,  such  contract  shall  be  set- 
tled on  the  basis  of  actual  value  as  compared  with  other  property 
of  the  same  kind,  but  of  different  grade,  in  this  market,  and  with 
property  of  the  same  grade  in  other  markets,  such  value  to  be 
ascertained  as  near  as  may  be  and  a  price  to  be  fixed  by  a  majority 
of  such  committee." 

This  report  was  made  to  S.  H.  McCrea,  Vice-President  and 
acting  President,  Mr.  Richards  being  in  attendance  upon  the  open- 
ing of  the  Pacific  Railroad.  No.  2  corn  went  up  15  cents  in  a  week, 
reaching  96  cents.  In  October  this  Rule  13  was  abolished  on  the 
ground  that  it  gave  too  much  power  to  three  men. 

In  August  the  rates  for  inspection  were  advanced  on  bulk  grain 
from  railroad  to .25  cents  per  car;  from  canal  to  $2  per  boat;  into 
■vessels  to  50  cents  per  1,000  bushels. 

In  September  there  was  a  storm  of  excitement  among  the  mem- 
bers when  two  members,  one  of  whom  was  C.  B.  Goodyear,  refused 
to  abide  by  the  decision  of  the  directors  and  were  threatened  with 
expulsion.  A  meeting  of  the  Board  was  held,  at  which  a  resolution 
was  passed  in  which  the  Directors  were  censured  for  their  action. 
Thereupon  the  entire  Board  of  Directors  tendered  its  resignation. 
A  second  meeting  of  the  Board  was  then  held,  the  offensive  resolu- 
tion replaced  with  one  of  much  milder  nature,  and  the  resignations 
were  withdrawn.  Mr.  Goodyear  effected  a  settlement  of  his  con- 
tracts and  was  reinstated.  The  press  of  the  city,  especially  the 
"Times,"  always  ready  to  find  fault  with  the  Board,  took  sides  in 
this  case  and  made  it  a  sensational  feature. 

September,  1869,  saw  the  culmination  of  the  speculation  in  gold. 
Premonitory  symptoms  came  the  first  of  the  month.  The  market 
was  feverish,  and  the  gold  room  at  New  York  became  more  and 
more  the  center  of  excitement.  The  "Commercial  Express"  of  Sep- 
tember 8  said  that  gold,  which  was  $1.31  two  weeks  previously, 
had  risen  to  $1.36@1.37%.  The  next  week  it  was  reported  that  gold 
had  fallen  two  points  and  that  millions  had  been  made  in  the  rise. 
It  was  stated  that  John  Morrissey  was  the  gainer  by  $2,000,000. 
It  was  near  the  end  of  the  month  that  there  came  the  noted  "Black 
Friday."    Gold  had  been  steadily  but  slowly  advancing,  and  it  was 


[1869]  OF  THE  CITY  OF  CHICAGO  385 

finally  rumored  that  a  corner  existed.  The  parties  to  it  suddenly 
threw  off  the  mask  and  their  brokers  went  into  the  gold  room,  bid- 
ding ever  higher  and  higher.  The  excitement  was  intense ;  some 
are  said  to  have  been  driven  insane,  business  men  were  forced  to  buy 
gold  to  protect  themselves,  and  the  price  was  forced  to  $1.60.  A 
bid  was  made  at  $1,623-4,  but  at  this  time  the  Secretary  of  the  Treas- 
ury threw  $2,000,000  of  gold  upon  the  market  and  the  price  broke 
at  once  to  $1.32@1.343^.  From  that  time  on  gold  declined  steadily. 
During  the  crisis  there  was  a  run  on  the  Tenth  National  Bank  of 
New  York,  the  Gold  Exchange  Bank  was  forced  to  suspend  and  the 
Gold  Board  adjourned  from  the  fatal  Friday  to  the  following  Tues- 
day. Many  failures  of  bankers,  merchants  and  business  men  gener- 
ally followed  in  the  wake  of  this  storm.  Prices  went  tumbling. 
By  October  13  No.  2  spring  wheat,  which  was  quoted  at  $1.17  Sep- 
tember 22  had  fallen  to  96^@99  cents.  Other  prices  fell  in  like 
proportion,  the  general  decline  in  prices  being  aided  by  the  abundant 
crops  of  1869.  By  November  4  wheat  had  reached  85  cents.  Money 
was  tight  and  growing  tighter.  It  was  stated  in  October  that  few 
could  borrow  at  10  per  cent,  and  in  December  it  was  said  that  the 
only  money  obtainable  was  at  2  to  3  per  cent  a  month.  Prices 
ranged  still  lower  towards  the  close  of  the  year,  and  on  December 
29  the  "Commercial  Express"  quotes  the  following  from  the 
Advance :  "Grain  trade  for  1869  has  been  disappointing  for  nearly 
everyone  engaged  in  it,  whether  producer  or  operator." 

By  the  first  of  May,  1869,  the  stock  of  everything  except  corn 
had  been  diminished,  still  there  was  no  decided  improvement  until 
far  into  the  summer,  when  stocks  and  surplus  began  to  show  signs 
of  large  reduction.  The  first  of  August  wheat  had  risen  to  $1.35@ 
1.40,  corn  to  85@88  cents,  oats  to  53@55  cents,  rye  to  $1@1.05,  and 
this  higher  level  of  prices  ruled  until  the  new  crops  came  in,  corn 
reaching  its  maximum  at  95  cents  to  $1.  But  these  higher  prices, 
chiefly  due  to  the  reduced  summer  stocks,  again  proved  the  bane 
of  all  parties  interested,  as  they  thereby  were  led  to  calculate  bet- 
ter returns  through  the  fall  and  winter  than  in  the  year  previous, 
and  made  all  their  plans  accordingly.  How  they  were  disappointed : 
Wheat  fell  to  77  cents,  rye  to  66  cents,  corn  to  68  cents,  oats  to  40 
cents,  barley  to  45  cents,  and  stocks  at  the  close  of  1869  were  two 
or  three  times  as  large  as  at  the  close  of  1868.  The  causes  were 
large  crops  and  decreased  demand,  caused  by  hard  times  and  the 
falling  value  of  gold.  Total  sales  of  grain  in  the  Chicago  market 
amounted  to  little  more  than  one-half  the  value  in  money  of  the 
sales  of  the  year  previous,  though  corn  fell  but  20  per  cent.  The 
value  of  grain  sold  in  Chicago  in  1868  was  $75,000,000;  in  1869, 
$50,000,000,  with  a  larger  crop.  In  Iowa  wheat  sold  for  from  40@60 
cents  per  bushel,  and  many  times  did  not  pay  the  expense  of  haul- 
ing. The  farmers  were  obliged  to  pay  greenback  prices  and  to  sell 
for  what  grain  would  bring  in  the  gold  markets  of  Europe.    At  the 


$- 


386  HISTORY  OF  THE  BOARD  OF  TRADE  [1869] 

close  of  the  year,  December  29,  the  "Express"  said  the  "tightness 
of  the  money  market  is  absolute."  Pork  went  down  with  a  rush 
and  hogs  fell  to  $8.2S@8.75. 

In  the  office  of  the  Secretary  of  the  Board  of  Trade  today  there 
'is  one  lone  volume  containing  the  Secretary's  reports  for  the  years 
1867-68-69-70.     So  far  as  known  only  two  or  three  other  copies  ot 
.  these  reports  are  now  in  existence.    This  is  a  legacy  of  the  great  fire 
'of  1871.    For  this  reason  it  has  been  thought  best  to  reprint,  in  this 
history,  copious  extracts  from  this  volume,  so  that  its  valuable  con- 
tents may  be  in  many  hands.     For  several  years  prior  to  1869  the 
annual  reports  had  been  issued  to  cover  the  year  from  April  1  to 
March  31,  but  in  1869  this  was  changed  and  the  report  made  to 
coincide  with  the  calendar  year,  with  a  supplemental  report  in  the 
spring,  relative  to  the  packing  trade.     Secretary  Charles  Randolph 
also  departed  from  another  custom,  and  instead  of  prefacing  the 
report  with  a  brief  introductory  made  it  include  a  review  of  the 
trade  of  the  preceding  year,  together  with  suggestions  of  policy  for 
the  future.    The  report  follows  : 

Chicago,  Jan.  1,  1870. 
J.  M.  Richards,  Esq., 

President  of  the  Board  of  Trade  of  the  City  of  Chicago. 

Sir:  I  beg  leave  herewith  to  submit  to  yourself  and  the  mem- 
bers of  the  Board  of  Trade  the  twelfth  annual  report  of  the  trade 
and  commerce  of  this  city  for  the  calendar  year  ending  the  31st  ult. 

At  the  annual  meeting  of  the  Board  in  April  last  it  was  voted 
to  change  the  time  of  issuing  this  report  from  April  1  to  January  1, 
as  it  was  believed  the  latter  date  a  more  fitting  time  to  take  a  review 
of  the  past,  and  to  gather  together  the  figures  and  comparisons  of 
the  business  of  the  city  ;  and  though  it  is  an  unfortunate  time  to  give 
anything  like  a  fair  detailed  statement  of  the  packing  and  provision 
trade,  it  is  believed  that  a  short  supplemental  report  on  that  branch 
of  the  city's  business,  to  be  made  out  at  the  close  of  the  fiscal  year 
of  the  Board,  about  April  1,  will,  with  the  regular  report,  meet  the 
views  of  all  more  nearly  than  any  other  arrangement. 

In  preparing  this  Report  an  unusual  amount  of  labor  has  been 
required  in  rearranging  tables,  made  up  heretofore  from  April  1  to 
April  1,  so  as  to  make  them  represent  the  business  of  the  respective 
calendar  years.     *     *     * 

The  year  just  closed  has  been,  in  some  respects,  an  unfortunate 
one,  at  least  so  far  as  the  business  of  dealing  in  the  products  of  the 
earth  are  concerned ;  and,  in  fact,  all  branches  of  trade  have,  to  a 
greater  or  less  extent,  shared  the  general  depression.  The  volume 
of  business  has  not  been  diminished,  but  it  has  not  been  conducted 
with  the  usual  return  of  profit.  Abundant  crops  in  nearly  all  por- 
tions of  the  earth  has  tended  to  depress  values,  and  the  low  prices 
that  could  be  realized  by  our  western  agriculturists  for  most  of  their 
products  have  reduced  their  ability  to  make  as  large  purchases  as 
usual,  and  thus,  in  turn,  the  merchant  and  trader  in  all  the  com- 
modities of  commerce  have  been  disappointed  in  the  results  of  the 
year's  business.    Added  to  these  causes  there  has  been  a  feeling  of 


[1869]  OF  THE  CITY  OF  CHICAGO  387 

uncertainty  in  regard  to  the  future  of  our  circulating  medium,  and 
the  possibility  of  an  early  return  to  a  specie  standard  of  values, 
which  has  made  conservative  men  extremely  cautious  about 
embarking  in  extended  enterprises  of  any  character.  It  is  to  be 
hoped  that  the  question  of  a  depreciated  currency,  which  has  for 
so  long  a  time  been  a  subject  of  discussion  and  unrest,  may  be 
speedily  removed  by  a  return  to  the  world's  standard  of  measuring 
values ;  provided,  of  course,  that  the  means  adopted  to  bring  about 
the  end  desired  are  not  such  as  will  produce  evils  of  greater  mag- 
nitude than  those  the  country  is  now  subject  to. 

Building 

Notwithstanding  the  general  depression  alluded  to,  our  city  has 
continued  to  grow  in  population,  and  great  improvements  have  been 
made  in  its  appearance  to  the  stranger,  while  our  citizens  refer  with 
just  pride  to  the  structures  of  elegant  finish  and  massive  proportions 
which  meet  the  eye  at  every  turn. 

The  city  officials  report  the  erection  in  the  city  during  the  year 
just  closed  of  3,810  buildings,  218  of  which  were  of  stone,  and  600 
of  brick;  of  these  287  were  four  stories  in  height,  93  were  five 
stories,  24  were  six  stories,  and  eight  were  seven  stories.  A  careful 
estimate  places  the  cost  of  the  buildings  erected  at  something  over 
sixteen  million  dollars.  Many  miles  of  street  paving  and  of  sewer- 
age have  been  completed.  In  fact,  in  every  respect  the  city  has 
greatly  advanced  and  been  improved  and  beautified. 

Finances 

While  for  the  past  few  years  our  citizens  generally  have  been 
increasing  in  personal  wealth,  and  many  have  amassed  large  for- 
tunes, there  has  been  a  very  marked  improvement  in  the  character 
and  means  of  our  banking  institutions,  especially  since  the  organi- 
zation of  banks  under  the  National  banking  law.  While  the  ability 
of  our  banks  to  accommodate  their  customers  has  been  large,  still 
the  demand  for  the  legitimate  use  of  capital  has  been  such  that 
money  has  for  nearly  the  whole  year  been  in  active  demand  at  10 
per  cent  per  annum  and  undoubtedly  a  considerable  amount  of 
additional  banking  capital  could  be  most  profitably  employed  in  the 
city.  It  is  to  be  hoped  that  Congress  will  at  an  early  day  make  such 
a  reapportionment  of  the  National  banking  franchises  as  will  give 
this  city  and  the  West  generally  its  due  proportion  of  banking 
facilities  and  circulation. 

And  in  this  connection  it  may  not  be  improper  to  express  the 
hope  that  the  convention  now  sitting  to  revise  the  Constitution  of 
this  State  will  devise  some  system  of  equalizing  State  taxation  that 
will  be  more  just  to  the  banking  interests  than  that  which  now 
prevails.  It  is  a  well  known  fact  that  real  estate,  and  most  kinds 
of  personal  property,  are  assessed  in  this  State,  for  purposes  of 
State  taxation,  at  not  over  25  to  30  per  cent  of  its  real  value.  Bank 
shares  seem  to  be  an  exception  to  this  general  rule,  and  are  taxed 
at  their  par  value,  thus  making  capital  employed  for  the  legitimate 
and  necessary  uses  of  business  pay  nearly  or  quite  four  times  as 
much  tax  as  that  which  is  invested  in  lands,  held,  in  many  instances. 


&l 


388  HISTORY  OF  THE  BOARD  OF  TRADE  [1869] 

for  purely  speculative  purposes,  and  where  it  is  entirely  useless  to 
the  public  at  large.  This  species  of  unfriendly  legislation  should 
be  at  once  changed,  and  capital  encouraged  to  seek  channels  where 
it  is  much  needed.  The  business  of  the  city  banks  has  been  increas- 
ing for  the  past  year,  as  shown  by  the  reports  of  the  clearing  house, 
the  entire  amount  of  clearings  for  1869  being  $731,444,111.11.  For 
1868  it  was  $718,485,908.39,  an  increase  of  $12,958,202.72.  These 
figures,  of  course,  do  not  represent  the  entire  banking  business 
of  the  city,  but  only  checks  on  one  bank  deposited  with  another 
and  passed  through  the  clearing  house  for  collection. 

Exchange,  owing  to  the  present  uniform  character  of  the  cur- 
rency throughout  the  country,  has  ruled  steady,  varying  only  to 
the  extent  of  the  expense  of  remitting  currency  by  express-sight 
exchange  on  New  York  varying  from  one-tenth  of  one  per  cent 
discount  to  the  same  per  cent  premium,  as  currency  was  plenty  or 
scarce  at  the  time. 

Flour 

The  year  just  closed  has  not  yielded  an  average  profit  to  those 
engaged  either  in  making  or  dealing  in  flour.  The  manufacture  of 
this  city  has  been  543,285  barrels,  against  732,479  barrels  in  1868, 
showing  a  decrease  of  189,194  barrels.  The  amount  received  from 
the  interior  has  been  2,218,822  barrels,  against  2,192,413  in  1868, 
an  increase  of  26,409 — a  net  decrease  in  the  amount  handled  of 
162,785  barrels.  Prices  of  flour  have  ranged  relatively  lower  than 
for  wheat  during  most  of  the  year.  Especially  is  this  true  of  the 
medium  to  good  grades.  A  few  of  what  are  termed  "fancy  brands" 
have  been  in  demand  at  fairly  remunerative  prices,  and  for  a  portion 
of  the  year  low  grades  have  been  salable  at  rates  that  left  a  good 
profit  to  the  miller.  Considerable  orders  have  been  executed  in  this 
market  for  flour  to  ship  direct  to  Great  Britain.  These  have  been 
mainly  for  rather  low  grades.  The  trade  with  New  England  points 
has  been  only  moderately  active,  while  many  points  at  the  East 
that  have  for  several  years  been  drawing  large  supplies  from  us  are 
able,  since  the  harvesting  of  the  last  crop  of  wheat,  to  procure  sup- 
plies from  their  own  immediate  neighborhoods. 

During  the  past  year  the  Board  of  Trade  has  established  a 
standard  of  grades  for  inspecting  flour.  It  is  not  intended  (at  least 
for  the  present)  to  grade  the  higher  qualities,  as  they  appear  to 
be  disposed  of  by  sample  with  more  satisfaction  to  both  buyer  and 
seller,  than  if  they  were  graded.  But  it  is  believed  that  if  it  were 
known  that  flour,  in  any  given  quantity,  could  be  obtained  in  this 
market  of  an  acknowledged  uniform  standard  of  quality,  many 
large  orders  would  be  sent  here  direct  that  are  now  executed  in 
the  eastern  cities,  where,  of  course,  additional  cost  is  incurred  by 
frequent  handling  and  commissions.  It  is  proposed  that  samples 
of  our  standards  of  "Extra"  shall  be  kept  at  the  Exchanges  in  the 
prominent  markets  for  breadstuffs  in  Great  Britain ;  and  as  there 
is  a  purpose  to  preserve  the  integrity  of  the  inspection  by  those 
standards,  it  is  anticipated  that  a  large  business  direct  may  result 
from  the  arrangement.  As  yet  but  little  has  been  done  under  the 
system  of  inspecting  by  grade,  but  it  is  expected  that  during  the 


% 


[1869]  OF  THE  CITY  OF  CHICAGO  389 

present  year  very  considerable  trade  will  be  inaugurated  under  it. 
It  has  hitherto  been  quite  difificult  to  give  an  intelligent  report  of 
the  flour  market  in  this  city  to  a  stranger,  owing  to  the  fact  that 
each  lot  of  flour  is  sold  by  a  sample,  the  exact  character  of  which 
cannot  be  made  clear  in  quotations. 

Wheat 

The  business  in  wheat  in  the  city  has  been  larger  during  the 
past  year  than  ever  before — the  receipts  aggregating  16,876,760 
bushels,  against  14,772,094  bushels  in  1868,  an  increase  of  over 
2,000,000  bushels.  The  trade  has  not,  as  a  general  thing,  been  of 
a  profitable  character.  Especially  has  this  been  true  of  it  since 
the  crop  of  1869  began  to  move  in  August.  Since  then  there  has 
been  a  steady  decline  in  price,  with  scarcely  any  reaction.  The 
crop  of  the  spring  wheat  producing  States  of  the  Northwest  is 
acknowledged  to  be  a  large  one  in  the  aggregate.  Some  few  points 
report  a  light  yield,  but  especially  in  Iowa  and  Minnesota  the  crop 
is  much  above  the  average  in  quantity.  The  quality,  as  a  whole, 
is  inferior  to  the  crop  of  1868,  but  it  is  by  no  means  of  poor  quality. 
The  winter  wheat  crop  of  1869  throughout  the  country  was,  with  few 
exceptions,  of  unusually  good  quality  and  of  heavy  yield,  and  winter 
wheat,  both  in  grain  and  flour,  has  been  pressed  for  sale  at  all 
points,  at  prices  but  little  above  spring.  This  fact  and  the  apparent 
abundance  of  wheat  in  Europe  has  had  a  depressing  influence  on 
spring  wheat.  The  year  closes,  for  both  wheat  and  flour,  with  a 
lower  range  of  prices  than  for  several  years  past. 

Corn 

At  the  close  of  1868  old  corn  was  pretty  closely  shipped,  and 
but  little  remained  in  farmers'  hands  in  the  West.  There  was  in 
store  in  this  city,  on  the  1st  of  January,  1869,  but  157,205  bushels 
of  old  corn,  and  this  gradually  diminished  until  April  1st,  when 
there  remained  but  about  60,000  bushels.  The  crop  of  1868  was  of 
inferior  quality  to  that  of  the  previous  year,  and  operators  were 
more  or  less  timid  in  the  early  part  of  the  year  about  investing  in 
it  to  hold  through  the  winter  in  store,  but  there  being  an  active 
demand  for  it  at  the  east,  for  shipment  by  rail,  at  the  low  rates  of 
freight  then  prevailing,  it  was  kept  moving  so  freely  that  the  con- 
dition of  that  remaining  in  store  was  fairly  preserved.  The  inspec- 
tions show  but  a  small  percentage  of  the  crop  being  up  to  the  stand- 
ard of  No.  1,  and  the  general  average  of  No.  2  has  been  inferior  to 
that  grade  in  most  years. 

The  winter  accumulation,  amounting  on  the  1st  of  April  to 
over  2,000,000  bushels,  came  out  of  store,  with  the  exception  of 
one  elevator,  in  as  good  condition  as  was  expected,  and  had  the 
movement  been  active  there  would  most  likely  have  been  but  little 
loss  resulting  from  any  imperfections  of  quality.  In  July,  however, 
there  being  considerable  of  No.  2  corn  that  had  lain  in  store  for 
some  weeks,  it  became  more  or  less  out  of  condition,  producing 
great  confusion  in  the  trade,  and  resulting  in  positive  loss  to  many. 
A  very  large  speculative  trade  has  been  carried  on  in  corn,  during 
most  of  the  year,  and  the  fluctuations  of  the  market  have  been 


390  HISTORY  OF  THE  BOARD  OF  TRADE  [1869] 

sufficient  to  sustain  excitement  almost  continually.  Very  little  of 
the  crop  of  1869  has  as  yet  come  forward,  its  condition  generally 
not  being  good  enough  to  justify  shipping.  Various  opinions  pre- 
vail as  to  the  amount  of  the  crop.  In  this  state  the  weight  of  opinion 
seems  to  be  that  the  yield  is  light  and  the  quality  inferior.  In  Iowa 
it  is  better,  but  from  that  State  but  little  comparatively  is  shipped 
unless  prices  rule  high.  It  may  perhaps  be  fair  to  assume  that 
from  present  prospects  and  reports  the  receipts  at  this  point  for 
1870  will  not  exceed  those  of  1869,  which  have  been  23,475,800 
bushels  against  25,570,494  bushels  in  1868,  a  decrease  of  2,094,694 
bushels.  The  eastern  States,  and  also  the  southern,  are  represented 
as  having  harvested  good  crops  of  corn,  and  while  American  con- 
sumption of  this  cereal  is  large  there  is  no  foreign  demand  what- 
ever for  it,  and  from  present  indications  prices  must  be  made 
entirely  on  the  basis  of  the  home  supply  and  demand.  Prices  at 
the  close  of  the  year  are  for  No.  2  corn,  69@70  cents. 

Oats 

The  receipts  of  oats  for  1869  show  a  large  falling  off  as  com- 
pared with  1868,  being  10,611,940  bushels,  against  16,032,910  the 
previous  year — a  decrease  of  5,420,970  bushels.  It  is  generally 
admitted  that  the  crop  of  1869  was  a  fair  one  in  the  Northwest,  but 
the  prices  prevailing  since  harvest  being  below  producers'  views 
they  have  declined  to  sell  very  freely.  The  crops  eastward  have 
been  better  than  in  1868.  The  trade  throughout  the  year,  with  but 
little  exception,  has  been  a  steady,  legitimate  one,  and  it  is  under- 
stood shipments  hence  have,  as  a  whole,  paid  reasonable  profits. 

Rye 

The  trade  in  rye  has  been  of  less  volume  than  for  several  years, 
and  the  crop  of  1869  seems  throughout  the  country  to  be  a  light 
and  inferior  one.  Shipments  hence  have  been  largely  by  rail  to 
supply  points  in  the  interior.  Receipts  for  the  year  have  been 
955,201  bushels,  against  1,523,820  in  1868— a  decrease  of  568,619 
bushels.  Prices,  December  31st,  close  at  70@72  cents  for  Nos.  2 
and  1. 

Barley 

The  barley  trade  for  the  year  has  been  very  fluctuating,  and  to 
those  who  were  engaged  in  buying  and  selling  it  on  speculation 
exceedingly  unsatisfactory.  The  amount  of  the  old  crop  of  1868 
remaining  in  western  producers'  hands  at  the  beginning  of  the 
year  was  small  and  came  forward  slowly,  realizing,  however,  fair 
prices.  The  crop  of  1869  has  proved  to  be  a  very  inferior  one,  very 
little  of  it  being  equal  to  the  standard  of  No.  2,  and  a  large  per- 
centage entirely  unfit  for  malting.  The  receipts  have  been  1,513,110 
bushels,  against  1,915,056  bushels  last  year;  a  decrease  of  401,946 
bushels;  of  the  amount  received  only  about  one-half  was  of  western 
production,  the  balance  arriving  here  by  lake  and  eastern  railroads, 
being  mainly  of  Canadian  growth.  City  brewers  have  been  obliged 
to  seek  supplies  in  the  East,  as  our  own  crop  was  below  the  stand- 
ard of  quality  required  by  them.  The  shipments  eastward  by  lake 
have  been  insignifiicant,  and  that  shipped  away  from  the  city  has 


[1869]  OF  THE  CITY  OF  CHICAGO  391 

been  mainly  distributed  to  points  in  the  interior.  Much  of  the 
crop  has  been  used  for  feeding  purposes  as  a  substitute  for  corn 
and  oats.  The  range  of  prices  has  been  very  wide,  and  for  much 
of  the  time  the  market  has  been  in  an  unhealthy  condition.  Canada 
barley  has  generally  been  sold  by  sample,  at  prices  rangeing  from 
5  to  50  cents  per  bushel  above  the  current  price  for  No.  2  western. 

Packing  and  Provision  Trade 

As  the  season  of  pork  packing  is  now  at  its  height,  no  review 
of  it  can  properly  be  made  or  statistics  furnished  that  would  be 
satisfactory  as  a  finality.  The  packing  season  opened  on  extremely 
light  stocks  of  provisions,  in  all  parts  of  the  country,  and  with  the 
knowledge  of  this  fact  and  the  reported  short  supply  of  hogs,  a 
speculative  fever  set  in,  and  the  price  of  hog  product,  especially 
mess  pork,  advanced  rapidly. 

This  excitement  has,  in  a  measure,  subsided  and  a  decline  of 
$3  to  $4  per  barrel  has  been  realized  from  the  highest  point  reached. 
Mess  pork  closing  at  $28  to  $28.50  per  barrel.  In  beef  packing  the 
business  has  been  light,  the  demand  for  the  product  being  of  a 
very  limited  character. 

General  Trade 

Our  city  merchants,  owing  to  the  low  prices  of  domestic  pro- 
duce, thereby  inducing  moderate  purchases  in  the  interior,  and  to 
the  shrinkage  in  value  of  stocks,  consequent  upon  a  gradual  decline 
in  gold,  have  been  obliged  to  content  themselves  with  small  mar- 
gins. The  volume  of  business  has  been  somewhat  larger,  and  the 
breadth  of  country  drawing  its  supplies  from  this  city  is  constantly 
increasing.  The  territory  west  of  the  Missouri  River,  tributary  to 
the  Union  Pacific  Railroad,  has  been  opened  as  a  new  field  to  Chi- 
cago enterprises,  and  a  large  business  has  been  done  in  that  direc- 
tion. It  is  understood  that  interior  merchants  generally  have  light 
stocks,  and  with  the  opening  of  the  spring  trade  it  is  expected  the 
necessities  of  the  country  will  bring  to  the  wholesale  trade  of  this 
city  full  life  and  vigor. 

Efforts  heretofore  made  to  induce  Congress  to  make  Chicago, 
and  other  western  cities,  ports  of  entry  for  foreign  goods  received 
via  the  seaboard  cities,  have  failed  thus  far,  but  will  not  be  aban- 
doned until  their  full  accomplishment  is  realized.  Goods,  to  a 
limited  extent,  are  now  received  in  bond,  but  they  are  subjected  to 
examination,  more  or  less  damage,  detention  and  expense,  at  the 
point  of  delivery  by  ship,  which  western  merchants  believe  can  be 
avoided  by  proper  regulations  for  their  prompt  delivery  in  bond 
from  the  vessel  to  responsible  transportation  lines,  subject  to  ex- 
amination and  appraisement,  at  this  or  other  prominent  cities  in 
the  West.     *     *     * 

Transportation 

Probably  no  question  is  of  more  vital  importance  to  the  West 
than  the  subject  of  transportation.  With  our  large  surplus  of  the 
products  of  the  earth,  the  mine  and  the  forest,  the  question  of 
how  these  products  can  be  most  cheaply  forwarded  to  the  consumer 
becomes  one  of  universal  interest,  and  in  its  results  affects  every 
individual  to  a  greater  or  less  extent.     The  introduction  of  rail- 


\ 


392  HISTORY  OF  THE  BOARD  OF  TRADE  [1869] 

roads  has  effected  a  wonderful  change  in  the  prosperity  and  wealth 
of  all  our  western  communities,  and  all  along  the  lines  of  the  thou- 
sands of  miles  of  railway  there  have  sprung  up  cities  and  villages 
as  by  an  enchanter's  wand.  Farms  have  been  cultivated,  and  pros- 
perity and  thrift  have  succeeded  to  the  comparative  wilderness  of 
the  years  recently  past. 

But  with  increasing  population  and  increasing  production  comes 
increasing  needs  for  outlets  for  the  surplus  of  the  country.  During 
the  past  year  no  new  facilities  for  transportation  eastward  from 
Chicago  have  been  opened.  The  railroad  lines  have,  however, 
materially  modified  their  rates  of  charges,  and  for  a  considerable 
portion  of  the  year  have  maintained  a  tariff  for  western  products 
at  a  point  about  as  low  as  it  has  hitherto  been  held  the  business 
could  be  done  for  without  positive  loss.  Forty-five  cents  per  hun- 
dred pounds  on  grain  from  Chicago  to  New  York  is  about  one  cent 
per  ton  per  mile.  This  (which  was  the  ruling  rate  for  several 
months)  is  lower  than  it  has  ever  been  before.  The  rate  by  steam 
hence  to  BulTalo  and  thence  by  railroad  to  New  York  at  one  time 
^  touched  30  cents  per  100  pounds  for  grain  and  50  cents  per  barrel 
■^  I  for  flour,  and  ruled  under  40  cents  for  grain  for  several  weeks'ybv 
i*sKJthe  propeller  line  running  in  connection  with  the  Erie  Railwayy 
1  These  are  unprecedently  low  rates.  Lake  freights  by  sail  have  been 
very  low,  both  eastward  and  westward,  and  the  returns  to  vessel 
owners  have  been  very  meagre.  Freights  on  the  New  York  canals 
have  been,  as  a  general  thing,  very  low,  and  with  the  exception  of 
short  intervals  quite  unremunerative  to  the  carrier,  after  paying 
the  tolls  imposed  by  the  State  of  New  York.  A  very  slight  reduc- 
tion in  canal  tolls  on  corn  and  oats  occurred  September  20,  but  not 
sufficient  to  produce  any  apparent  effect  upon  the  volume  of  busi- 
ness. It  is  a  proposition  plain  to  any  one  who  will  examine  the  sub- 
ject that  unless  the  State  of  New  York  reduces  the  tolls  on  western 
produce  to  a  point  that  will  merely  pay  the  cost  of  repairs  and 
expenses,  her  canals  must  ere  many  years  cease  to  be  the  great  high- 
way to  market  for  those  products.  And  it  does  not  follow  that 
when  the  business  is  diverted  from  her  canals  it  will  be  necessarily 
transferred  to  her  railways.  Other  cities  are  in  active  competition 
for  the  business  by  rail,  and  the  history  of  the  trade  in  corn,  espe- 
cially for  the  past  few  years,  forcibly  suggests  the  fact  that  the 
West  finds  purchasers  for  this  commodity  elsewhere  than  in  the 
metropolis  of  that  State.  Until  some  relief  can  be  afforded  east- 
ward from  Buffalo  there  seems  but  little  hope  for  any  further  abate- 
ment in  charges  from  this  point.  The  railroads  running  westward 
from  Chicago  do  not  seem  inclined  to  make  material  concession 
unless  compelled  to  do  so  by  competition.  It  is  believed  many 
abatements  might  be  made  by  them  to  the  interest  both  of  them- 
selves and  the  people  patronizing  them,  and  it  is  hoped  a  more 
liberal  policy  in  this  regard  may  prevail.  Railroad  lines  have  been 
extended  in  all  the  States  west  and  northwest  of  Chicago,  promi- 
nent among  which  may  be  noted  the  completion  of  the  Chicago, 
Rock  Island  &  Pacific  and  the  Chicago,  Burlington  &  Quincy  lines 
to  Council  Bluffs,  making  connection  there  with  the  line  to  Cali- 
fornia.   The  Union  and  Central  Pacific  roads  were  completed  with 


[1869] 


OF  THE  CITY  OF  CHICAGO 


393 


proper  ceremonies  on  the  8th  of  May,  since  which  time  the  business 
of  the  line,  both  in  passenger  and  tonnage  traffic,  has  been  as  large 
as  was  expected  and  is  steadily  increasing.  The  management  is 
now  in  the  hands  of  experienced  and  efficient  gentlemen,  and  it  is 
presumed  a  liberal  policy  will  characterize  its  business  with  the 
public.  Rates  of  fare  and  freight  must  necessarily  be  at  a  higher 
rate  than  on  older  lines  having  a  large  local  business,  but  it  is  a 
question  worthy  of  the  careful  consideration  of  those  in  charge 
whether  it  would  not  be  a  wise  policy  to  abate  the  present  high 
rates  and  induce  a  larger  through  as  well  as  local  business.  Chicago 
may  well  complain  of  some  of  the  discriminations  made  on  this  line. 
The  tarif?  published  to  take  eflfect  Dec.  6,  1869,  makes  but  40  cents 
difference  on  first  class  freights,  5  cents  on  second  class  and  no 
diiTerence  on  third  class  between  San  Francisco  and  Chicago,  or 
between  San  Francisco  and  New  York  and  Boston,  while  some 
classes  of  freight  are  taken  between  San  Francisco  and  New  York 
at  materially  lower  rates  than  between  this  city  and  San  Francisco; 
but  for  this  (as  it  seems  to  us)  unjust  discrimination,  our  dealers 
would  have  made  much  larger  shipments,  especially  of  butter,  dur- 
ing the  past  few  months. 

It  is  becoming  apparent  that  as  competing  lines  of  railroad  are 
opened  very  much  of  the  business  hitherto  carried  on  by  water  will 
be  diverted  to  the  rail,  and  while  it  is  not  expected  that  water  lines 
will  be  abandoned  or  perhaps  their  volume  of  business  reduced,  it 
would  seem  that  the  most  of  the  increase  of  traffic  will  be  done  by 
rail.  And  in  this  connection  it  may  not  be  improper  to  suggest  the 
absolute  necessity  of  providing  better  means  for  the  handling  of 
grain  in  bulk.  Very  great  losses  have  been  sustained  by  shippers 
eastward  from  loss  in  weight  at  the  point  of  delivery,  and  under  the 
present  arrangement  of  divided  responsibility  they  are  without 
remedy.  Until  grain  can  be  receipted  for  at  the  point  of  shipment, 
specifically  as  to  weight,  there  will  be  great  dissatisfaction,  and  a 
much  less  business  transacted  than  if  these  suggestions  were  com- 
plied with. 

Diversion  of  Trade  from  Chicago 

During  the  early  months  of  the  past  year  a  very  vigorous  effort 
was  inaugurated  by  the  merchants  and  press  of  St.  Louis  to  divert 
the  traffic  in  breadstuff's  of  the  upper  Mississippi  Valley  from  its 
accustomed  route  via  the  lakes  to  that  city,  and  thence  via  New 
Orleans  to  its  ultimate  destination  and  market.  For  this  purpose  a 
combination  of  merchants  called  "The  St.  Louis  Grain  Association" 
was  formed,  having  for  its  apparent  object  the  testing  of  the  feasi- 
bility of  that  route,  and  indeed,  many  were  more  than  half  persuaded 
that  a  large  diversion  of  Chicago  and  Milwaukee  trade  would  result. 
It  does  not  appear,  however,  that  such  will  prove  to  be  the  case,  as 
any  known  modes  of  transportation  by  that  route  are  proving  them- 
selves more  expensive  than  the  route  via  the  lake  cities.  The 
receipts  of  wheat  at  St.  Louis  for  1869,  by  the  published  reports 
from  that  city,  seem  to  have  been  in  excess  of  1868  nearly  3,000,000 
bushels.  No  means  are  at  hand  for  determining  in  what  months 
this  excess  occurred,  but  as  the  winter  wheat  crop  of  1869,  that  is 


\ 


^ 


.\\^ 


^ 


394  HISTORY  OF  THE  BOARD  OF  TRADE  [1869] 

naturally  tributary  to  St.  Louis,  was  large,  it  is  fair  to  presume  at 
least  a  good  portion  of  this  increase  occurred  since  the  harvest.  The 
receipts  at  Chicago  for  the  first  seven  months  of  1869  (when  this 
elTort  of  diversion  was  most  active)  was  over  4,000,000  bushels  in 
excess  of  the  corresponding  time  in  1868.  Only  74,358  bushels  of 
wheat  are  reported  as  exported  from  New  Orleans  since  September 
1.  How  much,  if  any,  of  this  came  from  northern  States  is  not 
known.  But  as  218,439  bushels  have  been  received  at  Chicago 
direct  from  St.  Louis  since  September  1,  over  80,000  bushels  of  it 
paying  railroad  transportation,  it  may  be  inferred  that  the  mer- 
chants of  that  city  have  discovered  that  Chicago  is  the  best  outlet 
for  their  surplus  wheat.  If  wheat,  after  being  sent  to  St.  Louis, 
seeks  Chicago,  as  a  market  of  sale,  or  point  of  transshipment,  it 
would  seem  a  wise  policy  to  send  it  directly  here  rather  than  to 
subject  it  to  the  expense  and  delay  of  a  trip  to  that  city.  The  entire 
exports  from  New  Orleans  for  the  year  ending  September  1,  1869, 
are  reported  to  be  of  wheat  138,976  bushels,  and  of  corn  394,908 
bushels — a  diversion  (providing  it  were  all  drawn  from  Chicago, 
though  in  point  of  fact  little  or  none  of  it  was)  of  not  very  formid- 
able proportions.  A  few  cargoes  were  sent  to  American  eastern 
cities,  but  only  sufficient  to  test  the  enterprise. 

C  Direct'  Foreign  Trade 

This  branch  of  business  for  the  past  year  shows  a  marked 
increase,  mainly  in  breadstufifs.  The  business  hitherto  had  been 
confined  almost  entirely  to  provisions,  but,  owing  to  the  high  price 
of  hog  product,  but  little  of  it  has  been  ordered  during  the  autumn 
and  winter.  Low  or  medium  grades  of  flour  have  been  shipped  to 
a  considerable  extent,  and  it  is  understood  that  orders  are  now 
awaiting  fulfillment  for  both  wheat  and  flour,  if  slight  reductions 
can  be  secured  on  transportation  charges,  and  the  required  con- 
cessions are  likely  to  be  made  at  an  early  day.  Through  bills  of 
lading  are  given  from  Chicago  to  all  the  principal  seaports  in  Great 
Britain  and  Ireland.  Freights  at  this  writing  are  nominal  at  75 
cents  per  100  pounds  grain  and  provisions,  and  $1.50  per  barrel  for 
flour,  payable  in  gold.  By  the  courtesy  of  S.  T.  Webster,  Esq.,  agent 
of  the  European  freight  line,  copies  of  the  reports  of  the  trade  and 
commerce  of  this  city  have  been  placed  during  the  past  summer 
with  the  Chambers  of  Commerce  of  several  of  the  cities  of  Great 
Britain  and  Ireland,  and  as  it  is  in  contemplation  to  place  samples 
of  our  grades  of  flour  in  the  rooms  of  those  organizations,  it  is  antici- 
pated that  business  may  be  promoted  to  the  advantage  of  both 
them  and  us. 

,  I  have  the  honor  to  be,  Mr.  President, 

Very  respectfully,  your  obedient  servant, 

Charles  Randolph,  Secretary. 

Monthly  Range  of  Prices  for  Cattle  and  Hogs  for  Year  1869 

Cattle  Hogs 

For  week  ending  January  9 $3.00@7.75  $9.25@  11.25 

For  week  ending  February  6 3.25@8.00  10.2S@12.25 

For  week  ending  March  6 3.50@8.25  8.50@11.00 


K^ 


£1869]  OF  THE  CITY  OF  CHICAGO  395 

Cattle  Hogs 

For  week  ending  April  3 3.50@7.75  8.75@11.00 

For  week  ending  May  1 4.50@7.75  8.50@10.25 

For  week  ending  June  5 5.2S@7.75  8.00@  9.30 

For  week  ending  July  3 4.00@7.75  8.25@  9.40 

For  week  ending  August  7 3.25@7.25  8.00@10.00 

For  week  ending  September  4 3.25@8.00  8.25@  9.90 

For  week  ending  October  2 2.7S@7.25  8.50@10.60 

For  week  ending  November  6 2.50@7.25  7.85@10.00 

For  week  ending  December  4 2.50@7.25  8.40@11.00 

Transportation 

By  lake — Navigation  opened  April  23  and  closed  November  29. 
The  opening  rates  were :  On  wheat,  per  bushel  to  Buffalo,  7@7y2 
cents.  Rates  reached  4J/^  cents  during  May  and  advanced  during 
June  as  high  as  9  cents.  The  low  point  was  reached  in  August  at 
ZYi  cents,  after  which  they  gradually  rose,  reaching  11^/^  cents  the 
first  week  in  November.  By  rail — Flour,  per  barrel  to  New  York, 
started  the  year  at  $1.50.  By  the  middle  of  February  it  had  fallen 
to  $1  and  with  the  opening  of  navigation  it  fell  to  90  cents.  This 
rate  was  maintained  through  the  summer  months,  reaching  $1.10 
in  October  and  advancing  to  $1.30  in  November  and  December. 
The  first  statistics  as  to  freight  from  the  Pacific  coast  are  given  in 
the  Secretary's  report  for  1869,  showing  that  the  trade  from  Cali- 
fornia to  Chicago  that  year  amounted  to  896,628  pounds,  the  ship- 
ments consisting  of  tea,  wines,  fruit  and  merchandise.  Via  lake  and 
rail — The  rates  on  flour  per  barrel  to  New  York  were  85  cents  in 
April,  this  rate  prevailing  until  July,  when  it  went  to  75  cents.  Dur- 
ing August,  September  and  October  it  stood  at  50@75  cents,  advanc- 
ing during  the  latter  month  to  $1.10  and  closing  the  season  at  $1.15. 
The  arrivals  at  the  port  of  Chicago  from  April  1  to  December  1 
were  13,551,  and  the  clearances  13,764,  averaging  one  arrival  or 
clearance  every  twenty-five  minutes.  The  total  receipts  of  the  / 
Custom  House  for  the  year  were  $785,633.36. 

The  supplemental  report  of  the  Secretary  on  the  provision 
trade,  covering  the  season  of  1869-1870,  was,  in  part,  as  follows: 

"Pork  packing  in  Chicago  has  been  larger  by  90,186  head  of 
hogs  than  that  of  the  previous  season,  while  the  average  weight 
of  the  hogs  cut  was  two  pounds  heavier,  being  equal  to  an  increase 
of  96,974  hogs  of  the  average  weight  of  last  season.  The  entire 
e.xcess  of  the  packing  of  the  Mississippi  Valley  for  1869-70  over 
1868-69  is  only  96,070  hogs,  while  the  general  average  of  the  whole 
this  season  is  one  pound  less  than  that  of  the  previous  one,  thus 
showing  that  while  Chicago  has  increased  both  in  the  number  of 
hogs  packed,  and  in  the  weight  of  them,  the  remaining  points,  as  an 
aggregate,  have  fallen  off  both  in  number  and  weight. 

"No  very  marked  changes  have  occurred  in  the  number  or 
names  of  city  packers,  the  business  being  done  in  the  main  by  the 
same  parties  as  last  year.  It  is  a  noticeable  fact  that  one  house 
has  cut  during  the  season  over  one  hundred  and  fifty  thousand  hogs. 
This  is  believed  to  be  the  largest  number  ever  cut  by  one  house 
during  any  season  or  in  any  city. 


396  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

"The  business  has  been  marked  by  great  and  sudden  fluctua- 
tions in  prices,  especially  of  the  product ;  these  frequently  occurring 
without  corresponding  changes  in  the  price  of  the  hogs ;  neverthe- 
less it  is  understood  the  packing  business  has  been  reasonably  profit- 
able. The  amount  of  speculative  trading  for  future  delivery  has  been 
very  large,  but  mainly  confined  to  mess  pork.  In  this  article  at 
times  the  amount  of  contracts  on  the  market  was  largely  in  excess 
of  the  entire  packing  of  the  season,  the  effect  being  to  force  prices 
beyond  what  they  would  have  ranged  had  sales  been  made  only 
on  legitimate  demand  for  consumption.  Southern  merchants  have 
been  large  buyers  of  provisions,  especially  of  cut  meats,  and  with 
the  increasing  facilities  for  shipment  by  rail  it  may  be  presumed 
the  future  of  this  branch  of  trade  will  be  very  largely  increased. 
The  high  prices  prevailing  in  this  country  for  meats,  compared  with 
those  current  in  Europe,  greatly  restricted  purchases  for  shipment 
to  Great  Britain,  and  it  was  not  till  late  in  the  season  that  any  con- 
siderable purchases  were  made  for  export. 

"Beef  packing  has  so  largely  fallen  off  at  Chicago  that  it  has 
ceased  to  demand  any  large  degree  of  attention.  The  number  of 
cattle  received  was  larger  in  1869  than  for  any  year  previously,  but 
the  business  of  packing  beef  has  been  less  than  for  any  of  the  past 
twenty  years.  The  product  has  been  in  very  light  demand,  its  place 
being  supplied  largely  by  pork  and  fresh  meats. 

"The  facilities  for  shipping  fresh  meats  to  the  eastern  cities  by 
railroad,  as  recently  inaugurated,  have  proved  eminently  satisfac- 
tory, and  the  business  promises  to  increase  and  grow  in  favor. 

Chas.  Randolph,  Secretary." 

Receipts  and  shipments:  Cattle  received,  403,102;  shipped, 
294,717;  hogs,  received,  1,852,382;  shipped,  1,285,955.  Packed,  cat- 
tle, 11,963;  hogs,  688,140.  The  Chicago  Produce  &  Provision  Co. 
packed  150,427  head  of  hogs,  being  referred  to  by  the  Secretary  as 
having  packed  the  largest  number  ever  recorded  of  a  single  house. 
A.  E.  Kent  &  Co.  with  57,336  and  Culbertson,  Blair  &  Co.  with 
55,760  were  their  nearest  competitors. 

1870 

The  year  1870  opened  gloomily  for  traders  and  farmers  alike. 
The  "Tribune"  of  January  1  published  a  statement  from  Omaha 
that  "accounts  from  various  points  report  the  farmers  as  suffering 
severely  owing  to  their  inability  to  dispose  of  their  grain  at  living 
prices."  After  the  high  prices  of  preceding  years,  77  cents  for 
wheat,  70  cents  for  corn,  40  cents  for  oats,  71  cents  for  rye  and  75 
cents  for  barley,  seemed  very  small  indeed,  although  before  the 
first  month  had  ended  corn  brought  a  slightly  better  price. 

Local  conditions  for  the  Board  were  not  improved  by  the  strike 
of  Western  Union  telegraphers,  which,  though  of  brief  duration, 
the  company  being  the  winner,  served  to  interrupt  business  tem- 
porarily. 

The  first  move  in  the  war  between  the  warehousemen  and  the 


[1870]  OF  THE  CITY  OF  CHICAGO  397 

traders  and  producers,  which  continued  all  through  this  year  and 
several  following  years,  was  made  by  the  elevator  owners  when 
they  announced  a  new  schedule  of  storage  rates.  Grain  received 
from  the  cars  was  to  be  charged  2  cents  per  bushel  storage  for  the 
first  20  days,  and  ;^  cent  per  bushel  for  each  five  days  thereafter 
while  in  good  condition.  The  announcement  continued  :  "All  grain 
that  may  become  heated  or  out  of  condition  while  in  store  will  be 
charged  1  cent  per  bushel  for  each  additional  five  days,  or  part  of 
same,  that  said  grain  may  remain  in  store  five  days  after  notice  has 
been  given  by  posting  said  notice  upon  the  bulletin  board  of  the 
Chicago  Board  of  Trade  that  such  grain  has  become  heated  or  out 
of  condition."  This  order  created  much  antagonism  and  reopened 
the  controversy  as  to  fraudulent  warehouse  receipts  and  other  evils. 
It  was  openly  declared  on  the  floor  of  the  exchange  that  such 
receipts  had  been-  floated  at  the  time  of  the  corner  in  corn  in  July, 
1869,  and  in  the  corner  in  oats  which  took  place  in  January,  1870. 
So  much  was  said  that  the  Directors  took  action  and  appointed  a 
committee,  consisting  of  H.  C.  Ranney,  Julian  S.  Rumsey,  J.  Mor-  L-' 
ton  Millar,  C.  J.  Gilbert  and  President  J.  M.  Richards  to  confer  with 
the  warehousemen  in  order  to  arrive  at  some  satisfactory  under- 
standing by  which  fraudulent  receipts  would  be  impossible  in  the 
future.  Their  proposal  was  a  central  agency  for  the  registration 
of  all  receipts,  and  none  not  registered  were  to  be  dealt  in  by  mem- 
bers of  the  Board. 

The  elevator  men  were  asked  to  co-operate  in  this  reform,  and 
a  meeting  was  held  at  which  the  elevator  interests  were  repre- 
sented by  Munn,  Scott,  Buckingham,  Hempstead  and  Preston. 
They  declined  to  express  themselves  and  took  rather  an  antago- 
nistic attitude./  Nevertheless  a  new  committee,  consisting  of 
Messrs.  Rumsey,  Millar  and  Ranney,  was  appointed  to  perfect  the 
plan.  This  was  the  subject  of  much  discussion  on  'Change  and  in 
the  newspapers.  The  "Times"  espoused  the  cause  of  the  elevator 
men  and  the  "Tribune"  took  the  opposing  view.  The  "Tribune" 
replied  to  a  "Times"  article  with  the  following,  which  clearly  states 
the  attitude  of  those  seeking  the  reform : 

"If  it  be  true,  as  the  'Times'  implies,  that  no  regulations  can  be 
admitted  which  will  interfere  with  the  right  of  elevator  proprietors 
to  issue  receipts  for  grain  not  in  their  possession,  to  charge  storage 
on  grain  which  never  goes  into  their  bins,  to  trade  ad  libitum  on 
the  property  of  other  people  which  has  been  confided  to  them  for 
safe  keeping,  and  for  that  purpose  only,  if  it  be  true  that  they  must 
be  permitted  to  do  all  this,  and  without  interference  or  investiga- 
tion, that  the  owners  of  property  in  that  case  cannot  even  have  the 
privilege  of  knowing  whether  their  property  is  in  store  or  not ;  if  all 
this  is  necessary  to  save  the  grain  trade  of  the  ctiy  from  collapse, 
then  we  say  the  sooner  a  collapse  comes  the  better." 

The  better  class  of  traders,  and,  in  fact,  all  those  not  financially 
interested  in  the  elevator  business,  became  more  and  more  deter- 


TT?^ 


398  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

mined  that  changes  must  be  made.     Backed  by  this  spirit  in  the 

Board  of  Trade  the  "Tribune"  continued  to  pour  its  broadsides  into 

the  ranks  of  the  warehousemen.     On  January  22  it  added  more  to 

its  list  of  charges,  saying  that  grain  shipped  in  is  invariably  short 

weight,  from  three  to  four  bushels  per  car,  and  is  also  short  in 

weighing  out.    Grain  inspected  at  a  certain  grade  is  issued  to  holders 

of  receipts  as  grain  of  a  higher  grade.    There  have  been  over  issues 

^^      of  receipts;  "split  receipts"  have  been  issued,  the  basis  for  which 

A^JT^    I  cannot  be  traced,  and  there  have  been  false  reports  of  heating.    The 

\j  "Tribune"  insisted  that  there  was  an  elevator  trust  or  pool   and 

I  urged  State  control.  After  some  days  the  committee  of  the  Board 
reported  the  following  recommendations :  First — Let  the  Board  of 
Trade  resolve  that  after  a  certain  day  no  unregistered  receipts  shall 
be  current  to  fill  any  transactions  upon  'Change.  Second^Let 
warehousemen  cause  to  be  printed  or  stamped  across  the  face  of 
their  receipts,  "Not  valid  for  delivery  from  store  until  countersigned 
by  the  inspection  registrar  of  the  Board  of  Trade."  Third — Let  the 
Directors  of  the  Board  of  Trade  provide  an  office  and  appoint  an 
inspection  registrar.  Fourth — Let  receipts  give  number  of  car, 
name  of  boat  or  vessel,  person  from  whom  received  and  date,  and 
permit  the  issue  of  no  new  receipt  until  the  old  one  is  cancelled. 
Fifth — Registrar  to  keep  account  of  all  grain  delivered  out  of  store 
the  previous  day  and  cancel  the  registration  upon  all  such  receipts. 
Although  especially  invited  there  were  no  warehousemen  present 
at  the  meeting  when  this  report  was  made  and  action  was  delayed 
in  the  efifort  to  get  them  to  agree  to  the  new  system.  An  adjourned 
meeting  of  the  Directors  was  held  Jan.  24,  1870,  at  which  time  Mr. 
Richards  presented  a  resolution  against  ship  subsidies  and  for  more 
economical  government,  and  the  warehouse  question  was  discussed. 
Mr.  McCrea  objected  to  the  presence  of  reporters  and  they  were 
excluded,  much  to  their  disgust.  The  Directors  decided  to  lay  the 
warehouse  question  before  the  full  Board.     That  there  was  much 

I  feeling  was  shown  by  the  letter  from  "An  Old  Member"  on  January 

126.  He  stated  that  at  first  all  grain  was  kept  separate  and  sold  by 
fM  Isample.  Next  all  grain  was  dumped  together  and  this  had  proven 
X*      lof  advantage  to  the  man  who  had  poor  grain  and  to  the  disadvan- 

Itage  of  the  man  who  had  good.  He  asserted  that  corn,  oats  and 
leven  soil  were  thus  sold  as  wheat,  and  he  demanded  more  rigid 
inspection  among  other  reforms.  At  the  full  meeting  of  the  Board 
January  26  N.  K.  Fairbank  moved,  and  it  was  carried,  that  the 
report  of  the  committee,  "looking  to  a  registration  of  warehouse 
receipts,"  be  accepted,  and  the  Directors  ordered  to  carry  its  pro- 
visions into  effect,  and  to  force  the  warehousemen  to  comply  with 
the  law.  At  the  same  meeting  the  resolutions  against  ship  subsidies 
and  recommending  economy  were  not  adopted,  but  were  referred  to 
the  Commerce  Committee. 

The  warehousemen  absolutely  refused  the  terms  proposed  by 


[1870]  OF  THE  CITY  OF  CHICAGO  399 

the  Board,  and  on  January  30  the  Tribune  said:  "The  persistent 
refusal  of  the  warehousemen  to  come  to  any  practical  arrangement 
with  the  Board  of  Trade  for  the  registration  of  warehouse  receipts 
affords  strong  presumptive  evidence  that  the  charges  (or  suspi- 
cions, if  that  phrase  is  preferred)  brought  against  them  are  true. 
We  understand  that  their  response  is  that  an  agreement  to  the 
proposed  plan  of  registration  (making  receipts  not  negotiable  unless 
registered)  would  be  equivalent  to  acknowledging  that  they  are 
rascals.  This  is  the  answer  which  a  rascal  would  naturally  make 
when  driven  into  a  corner." 

All  this  pressure,  on  the  Exchange,  in  the  press  and  through 
public  opinion,  finally  brought  the  elevator  men  to  a  place  where 
they  thought  some  compromise  advisable,  and,  in  February,  they 
presented  a  modified  plan,  which  the  Directors  could  not  accept. 
In  the  meantime  a  petition  was  circulated  asking  the  constitutional 
convention,  then  in  session,  to  take  action  for  the  protection  of  the 
public  against  elevator  frauds,  combinations  and  over-issue  jpf 
receipts  and  against  transportation  abuses  and  short  weights.  {^At 
last  the  elevator  men  proposed  as  a  compromise  that  they  would 
yield  to  the  registration  of  receipts,  but  they  refused  any  inspection 
of  cancelled  receipts.  Confronted  with  this  spirit  the  Directors  lost 
heart  and  decided  that  in  the  absence  of  any  co-operation  on  the 
part  of  the  warehousemen  registration  was  impracticable  and  that  ._  f^^ 
they  would  drop  the  whole  matter.  This  action  aroused  a  storm 
of  protest,  the  "Commercial  Express"  saying:  "The  attitude  of  the 
warehousemen  is  unreasonable  and  arbitrary."  So  strong  was  the 
protest  that  it  was  announced  the  next  day  that  the  directors  would 
reconsider  and  carry  the  plan  through.  State  papers  took  the  matter 
up  in  behalf  of  shippers,  the  Peoria  "Transcript"  publishing  a  strong 
editorial  in  behalf  of  regulation. 

Speaking  of  the  session  of  'Change  for  February  25,  1870,  the 
"Tribune"  throws  an  interesting  sidelight  on  the  times,  saying:  "The 
prospects  of  a  return  to  specie  payments,  the  reported  backing  down 
of  some  of  the  Directors  on  the  subject  of  registration  and  The 
Blonde's  matinee  on  Wabash  avenue  yesterday  were  the  leading 
staples  on  the  floor,  leaving  agricultural  products  to  occupy  a 
secondary  place  in  the  attention  of  the  operators."  In  passing,  it 
might  be  noted  that  "The  Blonde's"  burlesque  troupe  gave  Chicago 
a  seven  day's  sensation,  when  the  leading  lady  and  her  friends  horse- 
whipped the  editor  of  the  "Times,"  Mr.  Storey,  for  criticisms  of  the 
play  made  in  that  paper,  and  that  the  lady  was  given  a  tremendous 
ovation  at  the  opera  house  on  the  evening  following. 

The  Directors  finally  decided  to  act  on  the  elevator  matter, 
with  or  without  the  consent  of  the  warehousemen.  This  stronger 
attitude  forced  the  warehousemen  to  yield  somewhat,  and  the 
Directors  adopted  the  plan  first  proposed,  with  the  exception  of  the 
provision  as  to  the  cancellation  of  receipts.    The  reason  given  for 


400  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

this  was  that  it  was  believed  that  the  warehousemen  would  have 
used  this  section  as  a  lever  to  make  the  whole  plan  obnoxious.  It 
was  provided,  however,  that  the  warehousemen  must  report  the 
amount  of  grain  in  store  on  Tuesday  of  each  week.  Mr.  Rumsey 
told  of  the  opposition  of  the  warehousemen  to  this  provision  and 
upon  his  motion  it  was  stricken  out.  It  was  provided  that  the  plan 
should  go  into  operation  on  April  4,  and  to  cover  the  expense  there 
was  to  be  an  extra  inspection  charge  of  5  cents  per  car,  SO  cents  per 
canal  boat  and  10  cents  per  thousand  bushels.  The  warehousemen 
were  notified  W.  F.  Tompkins  was  appointed  registrar,  and  a  com- 
mittee on  registration,  consisting  of  H.  A.  Towner,  D.  W.  Irwin 
and  G.  D.  Watkins,  was  appointed.  The  warehousemen  accepted 
this  with  ill-grace  and  frustrated  one  of  its  principal  designs  by 
reporting  the  total  of  each  grain  in  store,  without  regard  to  grade. 
The  "Tribune"  of  March  9,  1870,  criticised  this  action  as  follows : 
"They  thus  hold  themselves  in  readiness  to  mix  and  change  grades 
ad  libitum."  And  it  was  stated  that  the  Board  would  take  further 
measures  to  force  compliance.  The  Inspection  and  Registration 
department  was  moved  to  the  reading  room  on  the  Exchange  floor 
and  the  reading  room  was  moved  to  the  floor  above.  Two  railroads 
agreed  to  collect  grain  freights  at  the  registrar's  office,  and  it  was 
reported  that  some  of  the  warehousemen  were  weakening  in  their 
opposition.  In  the  meantime  some  of  the  Board  members  weakened 
in  their  attitude  and  a  petition  was  circulated  stating  that  too 
summary  action  had  been  taken  and  that  it  should  have  been  de- 
ferred until  the  annual  meeting.  The  Secretary  wrote  the  elevator 
men  asking  them  to  report  by  grades  and  this  request  was  ignored. 
The  warehouse  question  became  the  leading  factor  in  the  approach- 
ing election  of  the  Board  of  Trade. 

The  feeling  was  further  increased  by  the  trouble  between  the 
Iowa  elevator  and  the  Northwestern  Railway.  The  Iowa  elevator 
ofifered  to  store  grain  for  one  cent  for  the  first  20  days,  and  one- 
half  cent  for  each  ten  days  thereafter.  They  had  a  track  laid  within 
a  few  inches  of  the  Northwestern  lines  for  six  months  but  were 
tmable  to  get  switch  connections,  and,  with  the  announcement  of 
the  reduced  rate,  the  Northwestern  refused  to  deliver  grain  on  a 
side  track  whence  it  could  be  taken  by  team  by  the  proprietors  of 
the  Iowa  elevator  and  others.  The  refusal  was  made  on  the  ground 
that  such  delivery  would  violate  the  Northwestern's  contract  to 
deliver  all  grain  to  the  "Wheeler"  elevator.  The  Tribune  of  March 
27th  stated :  "This  morning  five  carloads  of  corn  arrived  in  the 
city  over  the  Northwestern  and  Spruance,  Preston  &  Co.  notified 
the  railroad  authorities  that  they  wished  the  grain  to  be  delivered 
to  them.  This  was  refused  and  it  was  repeated  that  the  grain 
must  go  in  the  Wheeler  elevator." 

Just  two  days  later  the  Supreme  Court  of  Illinois  handed  down 
a  decision  that  the  Chicago  &  Alton  had  no  right  to  impose  an 


[1870]  OF  THE  CITY  OF  CHICAGO  401 

extra  charge  of  $5  for  delivery  of  grain  to  the  National  elevator. 
The  warehouse  act  of  1867  was  held  constitutional  and  it  was  de- 
cided that  a  railroad  must  deliver  grain  to  any  warehouse  on  its 
line  or  side  tracks  to  which  it  was  consigned. 

The  "antiwarehouse  monopoly"  faction  of  the  Board  held  a 
caucus  and  nominated  a  ticket  for  the  coming  election,  J.  S.  Rum- 
sey,  president;  B.  F.  Murphy,  first  vice-president;  P.  W.  Dater, 
second  vice-president.  The  Tribune  was  a  champion  of  the  anti- 
monopoly  ticket  and  predicted  that  the  election  would  be  close 
and  exciting  and  urged  all  members  to  vote.  The  Times  attacked 
Rumsey  and  the  warehouse  men  brought  all  their  influence  to 
bear  against  him.  Rumsey  was  defeated  by  S.  H.  McCrea,  but  it 
was  claimed  that  this  was  on  account  of  the  personal  popularity 
of  the  latter,  and  that  the  majority  of  the  anti-monopoly  ticket 
was  elected.  The  Board  at  this  meeting  passed  a  resolution  to  / 
prosecute  every  violation  of  the  warehouse  law.  A  committee  was 
also  appointed  to  act  with  the  packers  and  provision  men  for  a 
revision  of  the  rules  for  the  packing  and  inspection  of  provisions, 
and  the  initiation  fee  was  raised  to  $100.  At  the  election  the  vote 
stood:  S.  H.  McCrea,  489;  J.  S.  Rumsey,  381;  for  first  vice-presi- 
dent, B.  F.  Murphy,  450;  H.  C.  Ranney,  423;  second  vice-president, 
P.  W.  Dater,  769;  S.  T.  Webster,  83.  The  directors  elected  were: 
D.  H.  Denton,  E.  F.  Lawrence,  W.  H.  Goodnow,  O.  S.  Hough  and 
A.  H.  Pickering. 

On  retiring,  President  J.  M.  Richards  said  in  part,  as  follows : 
"Owing  to  the  loss  in  inspection  accounts,  payments  for  soldiers' 
monument  and  the  printing  of  our  Secretary's  report,  our  assets  are 
somewhat  less  than  a  year  ago.  At  present  rates  it  is  believed, 
however,  the  inspection  account  will  be  self-sustainin_g.  Our  mem- 
bership is  1,342,  an  increase  of  55  during  the  year.  (^  The  members 
of  the  Board  own,  or  represent  the  owners  of  nearly  or  quite  all 
of  the  grain  at  all  times  stored  in  the  elevators  of  the  city.  The 
elevator  proprietors  have  a  claim  for  storage  only,  and  issue  ware- 
house receipts  to  the  owners  to  represent  the  grain.  The  Board 
wishes  to  know  that  the  warehouse  receipts  outstanding  at  all  times 
exactly  correspond  to  the  amount  of  grain  in  store  and  to  secure 
this  knowledge  has  established  a  registration  of  all  warehouse  re- 
ceipts issued  for  grain  received  into  store.  The  system  will  neces- 
sarily be  incomplete  until  the  elevator  proprietors  shall  consent  to 
allow  our  Inspection  Registrar  to  cancel  the  warehouse  receipts 
after  the  grain  shall  have  been  delivered  on  them.  Whatever  power 
the  Board  lacks  to  accomplish  this  indisputably  correct  object,  it 
is  hoped  and  e.xpected  will  be  conferred  by  the  lawmakers  of  the 
State.  The  warehouse  proprietors  fail  to  comply  with  the  law 
in  making  their  return  of  grain  in  store.  They  issue  warehouse 
receipts  from  each  elevator  but  make  their  returns  in  one  aggregate 
amount  for  several  elevators.  They  also  fail  to  report  the  amount 
of  the  different  grades  of  grain,  which  much  reduces  the  value  of 


402  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

these  statements  to  the  public.  Such  returns  as  they  do  make  do 
not,  in  most  cases,  state  by  whom  sworn  to.  The  attorneys  of  the 
Board  of  Trade  were,  some  time  since,  directed  to  apply  to  the 
courts  to  compel  a  compliance  with  the  law  by  the  warehousemen, 
and  the  matter  has  been  delayed  at  the  request  of  their  attorney, 
owing  to  his  illness.  During  the  present  week  the  papers  will  be 
filed  in  court  to  test  the  rights  of  the  public  under  this  feature  of 
the  law.  At  present  each  receiver  of  grain  has  to  go  to  the  sev- 
eral railroad  and  elevator  offices  to  pay  his  freight  and  get  his 
warehouse  receipts.  If  this  could  all  be  done  at  one  place  it  would 
save  a  large  sum  of  money  in  the  transaction  of  the  grain  trade  of 
the  city,  all  of  which  would,  of  course,  be  added  to  the  value  of 
the  grain  at  the  home  of  the  producer.  A  reform  so  feasible  and 
wise  as  this  ought  not  to  wait  long  for  a  consummation. 

"All  suits  pending  against  the  Board  at  the  commencement 
of  the  year,  or  commenced  during  the  year,  have  been  dismissed  by 
the  complainants  or  the  courts,  and  the  right  of  the  Board  to  man- 
age its  own  commerce  and  business,  so  long  as  it  does  it  in  good 
faith  and  under  its  rules,  is  believed  to  be  fully  conceded. 

"The  business  of  handling  and  storing  grain  in  Chicago  should 
be  open  to  competition.  No  other  agency  or  means  ever  can,  or 
ever  will,  properly  regulate  it.  No  single  mind,  or  class  of  minds, 
if  honestly  intended,  possesses  wisdom  enough  to  justly  determine 
any  business  problem.  It  is  also  true  that  monopoly  breeds  self- 
ishness, inefficiency  and  corruption.  It  is  opposed  to  development 
and  progress,  and  not  only  destroys  a  country,  but  itself.  The  fail- 
ure of  most  legislation  is  an  attempt  to  determine  by  individual 
judgment  what  can  only  be  determined  by  competition.  The  genius 
of  our  country  and  of  our  age  is  to  freedom  from  tyranny  and  monop- 
oly, and  the  Board  of  Trade  should,  without  delay,  destroy  a  monop- 
oly highly  detrimental  to  every  interest  of  the  city.  As  a  direct 
means  of  putting  an  end  to  this  monopoly  every  railroad  company 
should  be  required  to  deliver  grain  at  any  accessible  place  in  Chi- 
cago that  the  owner  or  consignee  may  desire."" 

After  such  an  expression  from  the  President  the  order  issued 
by  the  Rock  Island  Railroad  was  greatly  displeasing  to  those  desir- 
ing competition.  The  order  was  that  all  grain  received  in  bulk  by 
that  road  must  be  taken  to  the  elevator  connected  with  the  track, 
whether  the  owner  wishes  it  or  not ;  permission  to  unload  direct 
from  the  cars  being  only  obtained  from  the  elevator  proprietors  and 
then  only  on  the  payment  of  2  cents  per  bushel  for  storage.  In 
spite  of  this,  S.  L.  Underwood,  by  legal  process,  forced  the  transfer 
of  two  cars  at  Englewood. 

By  whatever  influence  elected,  the  address  delivered  by  the 
new  president,  S.  H.  McCrea,  when  he  was  installed,  rang  true  and 
was  filled  with  determination  to  have  affairs  honestly  conducted. 
He  said : 

"The  business  of  dealing  in  wheat  receipts  in  this  market  has 
grown  to  gigantic  proportions,  and  not  only  our  own  members  and 


[1870]  OF  THE  CITY  OF  CHICAGO  403 

citizens  are  interested,  but  also  merchants  at  a  distance  are  con- 
stantly investing  large  sums  in  these  evidences  of  property.  Surely, 
if  it  be  possible  to  know  it,  it  should  be  known  that  these  issues  are 
in  every  way  proper  and  right,  and  it  is  no  reflection  on  the  integ- 
rity of  the  issuer  of  such  receipts,  if  he  be  asked  to  make  as  clear 
as  possible  the  record  of  these  issues."  He  recommended  a  fuller 
and  more  perfect  system  of  reporting  grain  in  store,  especially  in 
regard  to  grades.  Other  addresses  along  the  same  line  were  made 
by  B.  F.  Murphey  and  P.  W.  Dater,  first  and  second  vice  presidents. 
At  this  installation  it  was  announced  that  Chas.  Randolph  would 
continue  as  secretary.  At  this  meeting  also,  J.  C.  Dore  introduced 
a  resolution,  which  was  adopted,  urging  the  necessity  of  improving 
rivers  and  canals  in  order  to  maintain  cheap  transportation,  and 
asking  the  Constitutional  convention  to  amend  the  section,  already 
passed,  to  the  eflfect  that  "The  General  Assembly  shall  never  loan 
the  credit  of  the  state,  or  make  appropriation  from  the  treasury 
thereof,  in  aid  of  railroads  or  canals — by  adding,  "provided  that 
the  State  may  loan  its  credit  for  an  amount  of  money  the  interest 
upon  which  will  not  exceed  the  net  revenue  of  the  canal  and  im- 
proved rivers,  for  the  enlargement  of  the  Illinois  and  Michigan 
canal,  and  the  construction  of  a  canal  from  the  Illinois  River,  at 
or  near  Hennepin,  to  some  point  on  the  Mississippi  River,  with 
the  necessary  navigable  feeders." 

The  struggle  between  shippers  and  dealers  and  the  railroad 
men  continued  without  abatement.  In  April  Spruance,  Preston 
&  Co.  brought  three  suits  against  the  North  Western  Railway 
Company,  one  to  compel  that  railroad  to  grant  them  permission  to 
lay  a  switch  to  connect  their  elevator  with  the  tracks  of  the  com- 
pany ;  a  second  to  restrain  the  road  from  delivering  to  other  eleva- 
tors, grain  consigned  to  their  elevators,  and  the  third  for  damages 
incurred  by  the  failure  of  said  company  to  so  deliver  grain  to  them 
in  the  past. 

The  latter  part  of  April  the  elevators  consented  to  report  to 
the  board  by  grades  and  this  was  followed  by  an  act  on  the  part  of 
the  directors  which  later  was  much  criticized.  The  rates  of  inspec- 
tion were  lowered,  from  store  to  vessel  per  1,000  bushels,  from  60 
cents  to  50  cents,  from  store  to  cars  from  45  cents  to  40  cents,  and 
from  canal  boat  to  store  from  $2.50  per  boat,  to  50  cents  per  1,000 
bushels.  This  was  satisfactory,  as  reductions  in  cost  generally  are, 
but  it  was  followed  by  the  statement  that,  thereafter,  the  Board 
would  exercise  no  supervision  over  grain  in  store,  but  watch  the 
inspection,  in  and  out.  This  reduced  the  inspection  force  five  or  six 
men.  The  criticism  was  that  this  gave  the  warehousemen  full  con- 
trol of  the  grain  in  store,  enabling  them  to  grade  downward  to  the 
minimum  point  of  excellence  if  they  wish  to  do  so.  It  was  stated 
that  several  large  dealers  refused  to  allow  the  inspectors  to  "med- 
dle" with  their  grain,  preferring  to  sell  by  sample. 

The  great  result  of  all  these  complaints  was  the  adoption  of 


404  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

sections  in  the  new  constitution  regulating  both  warehouses  and 
railroads.  This  great  basic  enactment,  known  as  the  Constitution 
of  1870,  was  adopted  in  convention  May  13,  ratified  by  the  people 
July  2,  and  went  into  force  August  8,1870.  Article  13  made  special 
provision  for  warehouses  as  follows : 

"Section  1 — All  elevators  or  storehouses  where  grain  or  other 
property  is  stored  for  compensation,  whether  the  property  be  kept 
separate  or  not,  are  declared  to  be  public  warehouses.  Section  2 — 
The  owner,  lessee,  or  manager  of  each  and  every  public  warehouse 
situated  in  any  town  or  city  of  not  less  than  one  hundred  thousand 
inhabitants,  shall  make  weekly  statements  under  oath,  before  some 
officer  designated  by  law,  and  keep  the  same  posted  in  some  con- 
spicuous place  in  the  office  of  such  warehouse,  and  shall  also  file 
a  copy  for  public  examination  in  such  place  as  shall  be  designated 
by  law,  which  statement  shall  correctly  set  forth  the  amount  and 
grade  of  each  and  every  kind  of  grain  in  such  warehouse,  together 
with  such  other  property  as  may  be  stored  therein,  and  what  ware- 
house receipts  have  been  issued,  and  are,  at  the  time  of  making 
such  statement,  outstanding  therefor,  and  shall,  on  the  copy  posted 
in  the  warehouse,  note  daily  such  changes  as  may  be  made  in  the 
quantity  and  grade  of  grain  in  such  warehouse ;  and  the  different 
grades  of  grain  shipped  in  separate  lots  shall  not  be  mixed  with 
inferior  or  superior  grades,  without  the  consent  of  the  owner  or 
consignee  thereof.  Section  3 — The  owners  of  property  stored  in 
any  warehouse,  or  holder  of  a  receipt  for  the  same,  shall  always 
be  at  liberty  to  examine  such  property  stored,  and  all  the  books 
and  records  of  the  warehouse  in  regard  to  such  property.  Section 
A — All  railroad  companies  and  other  common  carriers  on  railroads 
shall  weigh  or  measure  grain  at  points  where  it  is  shipped,  and 
receipt  for  the  full  amount,  and  shall  be  responsible  for  the  deliv- 
ery of  such  amount  to  the  owner  or  consignee  thereof  at  the  place 
of  destination.  Section  5 — All  railroad  companies  receiving  and 
transporting  grain  in  bulk  or  otherwise,  shall  deliver  the  same 
to  any  consignee  thereof,  or  any  elevator  or  public  warehouse  to 
which  it  may  be  consigned,  provided  such  consignee  or  elevator, 
or  public  warehouse  can  be  reached  by  any  track  owned,  leased, 
or  used,  or  which  can  be  used,  by  such  railroad  companies ;  and 
all  railroad  companies  shall  permit  connections  to  be  made  with 
their  track,  so  that  any  such  consignee  and  any  public  warehouse, 
coal  bank  or  coal  yard,  may  be  reached  by  the  cars  of  said  railroad. 
Section  6 — It  shall  be  the  duty  of  the  general  assembly  to  pass 
all  necessary  laws  to  prevent  the  issue  of  false  and  fraudulent  ware- 
house receipts,  and  to  give  full  effect  to  this  article  of  the  consti- 
tution, which  shall  be  liberally  construed  so  as  to  protect  pro- 
ducers and  shippers.  And  the  enumeration  of  the  remedies  herein 
named  shall  not  be  construed  to  deny  to  the  general  assembly  the 
power  to  prescribe  by  law  such  other  and  further  remedies  as  may 
be  found  expedient,  or  to  deprive  any  person  of  existing  common 
law  remedies.  Section  7 — The  general  assembly  shall  pass  laws 
for  the  inspection  of  grain,  for  the  protection  of  producers,  ship- 
pers, and  receivers  of  grain  and  produce." 


[1870]  OF  THE  CITY  OF  CHICAGO  405 

As  will  be  seen,  the  provisions  of  the  constitution  of  1870  as 
to  warehouses,  are  of  wide  character,  and  Section  6,  of  article  13  is 
so  framed  as  to  assure  that  they  shall  be  liberally  construed.  The 
Board  of  Trade  had  a  meeting,  July  1,  1870,  at  which  a  resolution 
was  passed  urging  all  members  to  work  and  vote  for  the  new  con- 
stitution. The  feeling  against  the  warehousemen  was  again  aroused 
when  announcement  was  made,  the  latter  part  of  July,  1870,  that  a 
great  deal  of  grain  was  heating.  The  word  of  the  elevator  men  and 
even  of  the  inspectors  was  mistrusted  by  many.  On  July  28,  the 
Tribune  said: 

"The  name  of  a  Chicago  warehouseman  has  become  a  synonym 
with  that  of  a  pirate,  in  the  agricultural  districts  and  there  has  been', 
ample  justification  therefor,  although  some  innocent  men  suffer 
with  the  guilty.  A  man  who  sends  one  thousand  bushels  of  wheat 
to  Chicago  and  obtains  a  receipt  for  less  than  950;  who  pays  2  cents 
storage,  and  is  next  day  told  his  grain  is  'hot'  and  is  compelled  to 
sell  the  receipt  back  to  the  warehousemen  at  a  loss  of  10  cents  per 
bushel,  and  who  sees  the  same  grain  sold  and  delivered  next  day 
as  perfectly  sound,  and  at  full  price,  has  just  cause  to  pronounce 
this  system  of  doing  business  a  swindle  and  those  engaged  in  it  rob- 
bers. It  can  safely  be  affirmed  that  no  man  voluntarily  sends  his 
grain  to  Chicago  who  can  send  it  elsewhere.  Last  year  corn  ad- 
vanced 40  cents  per  bushel  and  the  outstanding  receipts  were  worth 
several  millions  of  dollars,  immediately  'hot  corn'  was  announced 
and  the  elevators  refused  to  permit  their  stock  to  be  examined  or 
to  state  the  amount  of  receipts  outstanding.  Those  receipts  fell 
40  cents  per  bushel.  It  is  generally  believed  that  the  issue  of  bogus 
receipts  was  very  large  and  that  the  profits  of  the  fraud  were 
enormous." 

The  day  following  the  publication  of  the  above  editorial  sev- 
eral elevator  men  and  two  or  three  inspectors  called  upon  the 
Tribune  for  a  retraction.  This  was  partially  made,  but  the  Tribune 
insisted  that  the  owners  of  grain  should  be  allowed  to  care  for  their 
grain  themselves  when  they  wished,  but  it  was  admitted  that  the 
crop  of  1869  was  inferior  and  that  there  was  much  heating  at  Mil- 
waukee as  well  as  in  Chicago. 

The  announcements  of  "heating"  continued.  The  inspection 
committee  made  a  new  ruling  that  "all  grain  in  a  heating  condition 
will  be  classed  as  "no  grade."  On  the  8th  of  August  Hunger, 
Wheeler  &  Co.,  proprietors  of  the  Galena  elevator,  declared  that  all 
No.  2  spring  wheat  received  by  them  prior  to  August  1st  was  out 
of  condition.  These  announcements,  aided  by  the  Prussian  vic- 
tories which  presaged  the  early  conclusion  of  the  war  then  raging, 
completely  demoralized  the  market.  It  was  stated  that  the  elevator 
men  were  not  complying  with  the  law  regarding  posting  of  notices 
and  the  condition  was  so  grave  that  not  only  Board  members  but 
business  men  generally  were  urged  to  meet.  The  Flint  and  Thomp- 
son elevator  was  the  only  one  where  grain  was  reported  in  good 


406  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

condition.     A  petition  circulated  on  the  floor  of  'Change  received 
many  signers.    The  petition  read: 

"The  undersigned  members  of  the  Board  of  Trade  of  Chicago, 
feel,  in  common  with  a  majority  of  the  business  community,  whether 
members  of  the  Board  or  not,  that  the  general  business  of  the  city 
is  being  seriously  damaged  by  the  reported  condition  of  the  wheat 
in  the  several  elevators  in  the  city,  and  we  feel  also,  that  a  matter 
of  such  vital  importance  should  have  a  full  and  thorough  investi- 
gation, as  the  posting  of  so  much  grain  out  of  condition  has  been 
the   cause  of  great   losses,  vexations  and   hard   sayings.     And  as 
,  there  is  certainly  a  very  great  chance  for  injustice  to  holders  of 
',  receipts,  in  the  way  in  which  the  Inspectors  may  designate  any 
particular   number  of   bins   out  of   condition,   and   th.e   owners   of 
receipts  have  no  means  of  knowing  but  that  the  number  of  receipts 
discredited  by  the  proprietors  would  cover  twice  the  amount,  and 
it  has  come  to  our  knowledge  that,  when  cargoes  have  been  load- 
.  ing,  no  wheat  out  of  condition  has  been  found ;  also  that  men  have 
'.  been  to  certain  elevators  and  asked  to  see  some  of  the  wheat  out 
of  condition,  and  they  have  not  been  able  to  find  any. 

"Now,  all  such  reports  as  the  above  are  well  calculated  to  cause' 
distrust,  and  lead  to  harsh  accusations,  all  of  which  is  extremely 
detrimental  to  the  business  and  welfare  of  all  business  men.  There- 
fore, we  would  respectfully  request  your  honorable  body  to  take 
such  steps  as  to  you  may  seem  just  and  proper  in  the  premises  so 
that  in  case  no  one  has  been  unjustly  injured  it  may  be  shown." 

On  August  23rd,  Mr.  Dunham  introduced  a  resolution  asking 
that  the  order  of  the  directors  that  the  chief  grain  inspector  post 
all  grain  that  was  out  of  condition,  be  repealed,  for  the  reason  that 
since  the  Board  ceased  to  exercise  any  control  or  supervision  of 
grain  while  in  store  it  had  become  impossible  to  ascertain  the  facts 
and  the  posting  was  of  no  value.  Concerning  this  resolution  the 
Tribune  said :  "There  is  no  doubt  that  since  the  Board  of  Trade 
withdrew  the  inside  inspectors  from  the  warehouses,  through  mo- 
tives of  economy,  they  have  opened  a  door  for  many  complaints  of 
fraud."  It  was  urged  that  the  Board  discontinue  all  supervision, 
but  insist  that  the  warehousemen  deliver  as  good  grain  as  receipts 
call  for.  The  motion  by  Mr.  Dunham  was  tabled,  but  this  did  not 
end  the  agitation.  The  Commercial  Express  of  August  25,  1870, 
said: 

"The  rottenness  at  the  bottom  of  all  this  bad  business  is  in  the 
assumption  that  sound  grain,  reasonably  clean,  is  perishable  prop- 
erty. It  is  not  perishable  property,  in  fact,  though  it  may  easily 
be  made  so.  This  is  where  the  statute  should  step  in  and  define 
the  duties  and  responsibilities  of  warehousemen  with  reference  to 
sound,  clean  grain.  Just  think  of  the  profit  of  allowing  5,000  bushels 
of  wheat  to  get  into  bad  condition,  and  on  the  strength  of  that  fact, 
having  the  opportunity  to  buy  500,000  bushels  of  good  wheat  at 
15  cents  per  bushel  less  than  its  value."    The  Tribune  asserted  that 


[1870]  OF  THE  CITY  OF  CHICAGO  407 

posted  grain  was  shipped  to  Milwaukee  and  there  sold  as  regular  ;  , 

No.  2,  and  added :    "It  is  a  noticeable  fact  that  most  of  the  posted  K 

receipts  were  bought  by  the  warehousemen  or  their  agents,  at  the  I 

reduction  of  12@15  cents  per  bushel  from  the  price  of  regular."  » 

Feeling  ran  so  high  that  a  petition  was  presented  to  the  Presi- 
dent and  the  directors  asking  the  dismissal  of  the  chief  grain  inspec- 
tor, R.  McChesney.  This  petition  was  not  heeded,  but  changes 
were  made  in  the  subordinate  force.  The  new  crop  was  good,  how- 
ever, and  as  the  season  advanced^nd  the  heating  became  a  thing 
of  the  past  the  agitation  ceased.  (^  new  angle  of  the  case  against 
the  warehousemen  developed  in  November,  when  the  Tribune  ^ 
charged  that  much  grain  inspected  and  received  as  of  low  grade 
was  later  reported  and  delivered  as  of  higher  grade.  }  In  its  issue 
of  November  5  the  Tribune  published  figures  in  support  of  this 
charge,  stating  that  according  to  the  Registrar  there  were  in  the 
elevators  245,297  bushels  of  No.  2  corn  and  493,755  bushels  of 
"rejected;"  whereas  the  warehouse  statement  showed  553,131  bush- 
els of  No.  2  and  but  139,210  of  "rejected."  The  difference  in  price 
amounted  to  about  $11,500,  and  the  Tribune  claimed  this  discrep- 
ancy existed  as  to  the  other  cereals. 

It  became  apparent  that  the  legislature  would  take  some  kind 
of  drastic  action  to  carry  into  effect  the  provisions  of  the  new  con- 
stitution. The_  elevator  men  and  many  members  of  the  Board  of 
Trade  wished  inspection  left  with  the  Board,  while  shippers  and 
commission  men,  as  a  rule,  favored  state  control.  It  was  while 
this  legislation  was  pending  that  the  Board  was  stirred  by  the 
greatest  scandal  it  had  ever  known.  There  came  the  sudden  an- 
nouncement, on  January  12,  1871,  that  Chief  Grain  Inspector  R.  Mc- 
Chesney had  been  suspended,  pending  the  return  of  a  certain  mem- 
ber who  had  been  concerned  with  the  Inspector  in  an  irregularity 
in  grain  inspection.  It  was  charged  that  about  the  end  of  October, 
1870,  a  cargo  of  grain  was  shipped  from  the  Flint  and  Thompson 
elevator,  in  the  propeller  Colorado,  which  cargo  consisted  of  about 
27,700  bushels  of  oats  and  about  8,000  No.  3  and  rejected  barley; 
the  two  being  mixed  together,  and  the  inspector  issuing  a  certificate 
which  rated  the  whole  as  No.  2  oats.  The  inspector  claimed  that 
this  was  legitimate,  that  the  oats  were  white,  and  superior  to  regu- 
lar No.  2  and  that  just  enough  barley  was  mixed  with  them  to  reduce 
them  to  No.  2  standard.  It  was  also  claimed  that  the  cargo  was  sold 
in  Buffalo  by  sample  and  that  the  inspection  certificates  was  not 
used.  This  announcement  created  a  great  furore  on  'Change  and 
in  the  press.  Members  who  were  opposed  to  the  inspector  were 
jubilant  and  applauded  the  directors  for  not  hushing  the  matter  up. 
The  Tribune  of  January  17,  1871,  charged  that  members  of  the 
inspection  committee  had  been  mixed  up  in  questionable  deals 
and  that  parties  inside  the  directors'  room  had  profited  by  advance 


408  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

knowledge  of  the  posting  of  grain  out  of  condition  the  previous 
summer,  to  the  extent  of  making  deliveries  of  grain  as  "regular," 
which  was  declared  "hot"  a  few  minutes  after  the  receipts  had  gone 
out  of  their  hands.  It  soon  developed  that  D.  H.  Denton,  a  direc- 
tor and  member  of  the  inspection  committee,  was  the  official  in- 
volved with  Mr.  McChesney.  Mr.  Denton  had  been  extremely 
popular  with  Board  members  as  was  shown  by  the  fact  that  he 
received  the  highest  vote  for  director  at  the  election  of  1870.  The 
Tribune  stated  that  this  was  the  first  time  the  integrity  of  an  officer 
of  the  Board  had  been  questioned  but  that  there  were  a  number 
of  instances  on  record  where  officers  had  cast  votes  which  took 
hundreds  of  dollars  out  of  their  own  pockets.  The  Commercial 
Express  also  demanded  a  full  investigation  and  declared  that  other 
questionable  transactions  would  be  brought  to  light.  In  the  height 
>f  this  expose  which  focused  the  public  mind  upon  the  elevators 
( and  the  inspection  department,  the  railroads  added  fuel  to  the  flame 
by  their  order  that  grain,  consigned  to  other  than  the  favored  ele- 
ctors must  be  shipped  in  bags.  On  January  27,  1871,  the  report 
of  the  directors  in  the  McChesney  case  was  made  to  the  full  Board. 
The  meeting  was  called  to  order  by  President  McCrea  and  the 
report  read  in  part  as  follows : 

"Whereas ;  It  has  been  proven  before  this  board  of  directors 
and  admitted  by  the  Chief  Inspector  of  grain,  an  officer  appointed 
by  this  board,  that,  under  his  sanction  and  direction,  a  certificate, 
improper  in  its  character,  was  issued  officially  for  the  inspection  of 
a  certain  cargo  of  grain,  and, 

Whereas ;  The  said  chief  inspector  has  given  no  satisfactory 
reason  for  such  fraudulent  issue,  oflfered  no  excuse  or  apology, 
except  that  he  was  requested,  or  directed,  to  do  so  by  the  owner  of 
the  grain  who,  however,  denies  having  made  any  such  request, 
or  given  any  such  order ;  therefore,  be  it 

Resolved,  That  the  resignation  of  the  inspector  be  not  accepted, 
but  that  Robert  McChesney  be  removed  from  the  office  of  Chief 
Inspector  of  grain  under  the  appointment  of  this  board,  such  re- 
moval to  take  effect  immediately. 

The  testimony  as  to  Mr.  Denton's  connection  with  the  affair 
was  presented  to  the  full  board,  together  with  a  letter  from  Mr. 
Denton,  denying  that  he  had  been  guilty  of  misconduct.  The 
report  of  the  directors  was  not  well  received.  There  was  much 
sympathy  for  Mr.  McChesney.  He  was  an  aged  man  and  had  been 
one  of  the  most  prominent  figures  on  'Change.  Misfortune  had 
come  to  him  in  full  measure.  But  a  few  years  previously,  six  of  his 
family  were  victims  of  an  epidemic,  which  swept  Chicago,  and 
recently  he  had  lost  all  his  property  in  one  of  the  many  corners, 
and  at  that  time  he  had  turned  over  all  of  his  personal  property 
to  meet  his  obligations.  It  was  argued  that  as  a  subordinate  he 
was  being  treated  with  great  severity,  while  the  man,  under  whom 


[1870]  OF  THE  CITY  OF  CHICAGO  409' 

he  was  working,  was  not  punished  as  severely  as  the  facts  seemed 
to  warrant. 

Members  of  the  Board  complained  that  Denton  was  being- 
"whitewashed"  and  that  the  directors  were  dodging  their  responsi- 
bility. Murry  Nelson  moved  that  a  committee  be  appointed  to 
investigate  both  charges  and  named  N.  K.  Fairbank,  George  Wat- 
son, W.  H.  Low,  C.  E.  Culver  and  S.  G.  Hooker  as  the  committee. 
Mr.  Adams  objected  that  this  committee  was  friendly  to  Denton,, 
and  on  the  motion  of  Mr.  Watson  the  entire  matter  was  referred 
back  to  the  directors.  In  the  meantime  Mr.  McChesney  claimed 
that  he  had  not  been  given  a  fair  hearing,  that  he  had  been  prac- 
tically forced  to  the  act,  that  he  was  being  made  a  scape-goat  and 
that,  if  given  the  opportunity,  he  would  disclose  many  questionable 
acts  on  the  part  of  the  inspection  committee.  It  was  decided  to 
give  the  aged  man  an  opportunity  to  defend  himself  before  the  full 
board,  and,  on  February  2,  1871,  there  occurred  one  of  the  most 
dramatic  meetings  the  Board  of  Trade  has  ever  held.  Nearly  over- 
come with  emotion  Mr.  McChesney  made  his  appeal.  He  told  of 
the  misfortunes  which  had  befallen  him  and  said  that  through  j^.. 
it  all  this  was  the  first  time  his  honor  had  been  impugned.  He 
accused  members  of  the  inspection  committee  with  frequent  inter- 
ference with  his  work  and  with  changes  of  orders  and  certificates 
without  proper  reason.  He  involved  not  only  Mr.  Denton,  but 
Messrs.  Sage,  Lincoln,  Dater  and  Munn.  Mr.  Lincoln  spoke, 
defending  himself,  as  did  Mr.  Dater  and  Mr.  Munn,  all  denying 
any  improper  conduct,  but  alleging  that  McChesney  had  been  arbi- 
trary and  had  shown  favoritism,  and  that  it  was  necessary  to  revise 
his  rulings  at  times.  Nevertheless,  there  was  much  sympathy  for 
Mr.  McChesney  and  on  motion  of  George  Watson  the  directors 
were  ordered  to  review  the  case.  On  the  following  day  D.  H. 
Denton  was  suspended  from  the  inspection  committee  for  alleged 
malfeasance,  and,  it  was  said  that  this  was  the  first  known  case 
where  an  officer  had  used  his  office  for  his  personal  benefit.  Upon 
the  report  on  the  McChesney  case  being  referred  back  to  the  direc- 
tors, President  McCrea  filed  specific  charges  against  Mr.  Denton, 
which  charges  were  sustained  and  the  suspension  from  the  board 
of  directors  was  made  permanent.  When  this  report  was  made  to 
the  full  Board,  on  February  10,  1871,  it  was  not  satisfactory  to  many 
members,  who  held  that  if  an  official  had  been  guilty  of  misconduct 
it  was  not  sufficient  simply  to  suspend  him  from  his  office,  but  that 
he  should  be  expelled  from  the  Board.  A  motion  to  this  effect 
was  made  by  Mr.  Ranney  and  seconded  by  Mr.  Watson.  Mr.  Fair- 
bank  moved  that  as  the  amount  involved  was  small,  a  vote  of  cen- 
sure be  passed  and  the  case  against  Denton  dropped.  Neither  of 
these  motions  suited  the  members,  and  it  was  finally  decided  to 
place  Mr.  Denton  on  trial  before  the  whole  board.  This  scandal 
created  much  comment  throughout  the  entire  west,  and  one  result 


r 


410  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

was  the  circulation  of  a  petition  throughout  the  state,  asking  the 
legislature  to  place  inspection  of  grain  under  state  control.  Hon. 
E.  M.  Haines  introduced  a  bill  in  the  Legislature,  providing  for 
state  inspection,  but  allowing  the  Board  of  Trade  to  appoint  the 
inspectors.  At  a  meeting  of  the  members  held  in  the  "Open" 
Board,  Vice  President  Dater  presided,  and  it  was  decided  that  the 
Board  should  support  the  Haines  bill,  with  some  minor  changes. 
On  March  1st,  occurred  the  trial  of  Mr.  Denton.  George  Watson, 
Wm.  N.  Brainard  and  C.  J.  Davis  were  appointed  as  a  committee 
to  conduct  the  prosecution,  and  N.  K.  Fairbank  represented  Mr. 
Denton.  It  was  decided  to  admit  new  evidence  and  a  letter  was 
produced  from  the  Buffalo  purchaser  of  the  grain  in  which  he  indi- 
cated that  there  had  been  fraud.  Wirt  Dexter,  a  member  of  the 
Board,  charged  that  there  had  been  irregularity  in  certificates 
issued  to  D.  H.  Lincoln  and  Co.,  and  to  P.  W.  Dater,  and  the 
Board  was  the  scene  of  great  excitement  when  these  charges  were 
made.  The  outcome  of  the  trial  was  that  the  board  of  directors 
was  sustained,  Denton's  resignation  as  a  director  was  accepted 
and  a  vote  of  severe  censure  was  passed. 

The  result  of  this  affair  and  the  many  complaints  which  had 
been  made  was  the  passage  of  the  warehouse  law  in  April,  1871. 
This  law  took  the  inspection  of  grain  out  of  the  hands  of  the  Board 
of  Trade,  and  placed  it  in  charge  of  the  Railroad  and  Warehouse 
commission,  which,  as  its  name  indicated,  had  charge  of  the  regula- 
tion of  warehouses  and  railroads,  and  the  enforcement  of  the  law 
regarding  them. 

This  act  went  into  force  July  1,  1871.  Section  one  provides 
that  public  warehouses  shall  be  divided  into  three  classes,  to  be 
designated  as  classes  A,  B  and  C,  respectively.  These  classes  are 
defined  under  section  two  as  follows : 

"Public  warehouses,  of  class  A,  shall  embrace  all  warehouses, 
elevators  and  granaries  in  which  grain  is  stored  in  bulk,  and  in 
which  the  grain  of  different  owners  is  mixed  together,  or  in  which 
grain  is  stored  in  such  a  manner  that  the  identity  of  different  lots 
or  parcels  cannot  be  accurately  preserved ;  such  warehouses,  eleva- 
tors or  granaries  being  located  in  cities  having  not  less  than  100,000 
inhabitants.  Public  warehouses  of  class  B  shall  embrace  all  other 
warehouses,  elevators  or  granaries  in  which  grain  is  stored  in  bulk, 
and  in  which  the  grain  of  different  owners  is  mixed  together.  Pub- 
lic warehouses  of  class  C  shall  embrace  all  other  warehouses  or 
places  where  property,  of  any  kind  is  stored  for  a  consideration." 

The  act  provides  for  licenses  and  bond,  and  penalty  for  ware- 
housemen doing  business  without  a  license.  Other  sections  make 
provision  against  discrimination,  provide  for  inspection,  grading 
and  mixing  of  grain,  and  for  the  manner  of  issuing  receipts  and 
cancelling  same.  Section  10,  specifically  provides  that  "No  ware- 
houseman in  this  state  shall  insert  in  any  receipt  issued  by  him, 


[1870]  OF  THE  CITY  OF  CHICAGO  411 

any  language  in  anywise  limiting  or  modifying  his  liabilities  or 
responsibility,  as  imposed  by  the  laws  of  this  state.  Section  14 
of  this  act  provides  for  the  appointment  of  a  chief  inspector,  deputy 
inspectors,  a  warehouse  registrar,  etc.  Section  21  provides  that, 
in  case  any  owner  or  consignee  of  grain  shall  be  dissatisfied  with 
the  inspection  of  any  lot  of  grain  or  shall,  from  any  cause,  desire 
to  receive  his  property  without  its  passing  into  store,  he  shall  be 
at  liberty  to  have  the  same  withheld  from  going  into  any  public 
warehouse  (whether  the  property  may  have  previously  been  con- 
signed to  such  warehouse  or  not),  by  giving  notice  to  the  person 
or  corporation  in  whose  possesion  it  may  be  at  the  time  of  giving 
such  notice ;  and  such  grain  shall  be  withheld  from  going  into 
store,  and  be  delivered  to  him,  subject  only  to  such  proper  charges 
as  may  be  a  lien  upon  it  prior  to  such  notice. 

The  warehouse  men  declared  that  they  could  comply  with  this 
law  and  that  they  must  quit  storing  grain  and  buy  and  sell  it  them- 
selves, thus  avoiding  the  provisions  of  the  law.  The  directors  of 
the  Board  of  Trade,  also,  considered  the  advisability  of  dropping 
the  Registrar  of  receipts,  as  unnecessary  under  the  new  law.  The 
new  law  also  prescribed  rates  for  storage,  and  this  the  warehouse 
men  decided  to  fight  as  being  unconstitutional.  They  held  a  meet- 
ing in  June,  1871,  and  decided  upon  a  definite  course  of  action,  and 
although  they  declined  to  meet  the  rates  imposed  by  law,  they 
reduced  their  charges  to  two  cents  per  bushel  for  the  first  twenty 
days  or  part  thereof,  and  one-half  cent  per  bushel  for  each  succeed- 
ing ten  days,  or  part  of  ten  days  that  the  grain  might  remain  in 
store.  The  rates  fixed  by  law  were  2  cents  for  30  days,  and  J4  cent 
for  each  succeeding  15  days.  This  indicated  that  the  warehouse- 
men did  not  propose  to  take  out  licenses  and  would  store  grain  only 
for  those  who  requested  them  to  do  so  in  writing.  They  asserted 
that  they  were  ready  to  comply  with  the  constitution,  and  would 
make  weekly  reports  of  grain  in  store,  but  that  legal  advice  said 
the  bill  passed  by  the  legislature  was  unconstitutional  in  more  than 
one  particular.  Preparatory  for  the  new  law  the  warehousemen 
provided  printed  requests  for  the  storage  of  grain.  The  new  com- 
missioners, Hon.  Gustavus  Koerner  of  St.  Clair  county,  chairman ; 
Richard  P.  Morgan,  of  McLean  county,  and  D.  S.  Hammond,  of 
Cook  County,  were  appointed  July  1,  1871,  and  at  once  began  to 
organize  for  business.  Hitchcock,  Dupee  and  Evarts,  attorneys 
for  the  Board  of  Trade,  gave  their  opinion  that, the  law  was  consti- 
tutional, but  that  probably  it  would  not  become  effective  until 
January  1,  1872.  They  held  that  certificates  of  inspection  of  the 
Board  were  superceded  by  those  of  the  commission.  (,  The  railroads 
proposed  to  oppose  the  law  by  charging  from  eight  to  ten  cents 
more  per  bushel  for  shipments  to  independent  elevators,  by  the 
simple  expedient  of  making  a  reduced  rate  of  that  amount  on  grain 
shipped  to  their  elevators.     Another  difficulty  arose,  for  the  new 


412  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

law  made  no  provision,  so  it  was  claimed,  for  discrimination  between 

I  old  grain  and  new.     New  barley  was  worth  several  cents  more 

\J  per  bushel  than  old,  and  it  was  just  the  other  way  with  wheat, 

I  oats  and  rye.     It  was  predicted  that  the  matter  would  come  to  a 

'  deadlock,  unless  some  arrangement  was  entered  into  whereby  the 

warehousemen  should  agree  to  recognize  the  difference  between 

the  two  crops  and  deliver  old  grain  on  receipts  which  had  been 

paid  for  on  the  understanding  that  old  grain  would  be  delivered 

when  they  were  presented.    The  facts  were  held  to  show  a  serious 

defect  in  the  law  as  it  was  very  seldom  that  there  was  not  a  radical 

difference  in  the  average  quality  of  the  crops  of  two  succeeding 

years.     The  commission  men  were  also  afraid  of  a  raise  of  rates 

when  the  railroads  were  obliged  to  guarantee  weights  under  the 

new  law. 

The  Chief  Grain  Inspector  went  ahead  with  his  work,  opening 
offices  on  the  corner  of  Washington  street  and  Fifth  avenue,  and 
appointing  a  corps  of  inspectors.  These  offices  opened  August  7th, 
and  the  Board  immediately  withdrew  its  inspectors  and  its  regis- 
tration force.  One  of  the  first  acts  of  the  inspector  was  to  reject 
two  boat-loads  of  grain.  There  were  criticisms  of  inspections, 
quite  naturally,  by  those  opposed  to  the  state  system,  but  the  high 
quality  of  the  new  crop  made  the  task  comparatively  easy  for  the 
inspectors.  The  new  crop  was  also  abundant,  and  by  October, 
1871,  it  was  found  that  the  storage  capacity  of  the  city  was  about 
to  become  exhausted,  grain  was  pouring  into  the  market  and  there 
was  already  6,000,000  bushels  in  store.  The  nominal  capacity  of 
the  elevators  was  more  than  11,000,000  bushels,  but  the  working 
capacity  was  only  8,000,000  bushels.  This  was  the  condition  of 
the  elevators  at  the  time  of  the  great  fire,  and  for  a  time  this  dis- 
aster ended  all  consideration  of  inspection  laws  or  state  control  of 
warehouse  or  railroad  rates. 

Having  traced  the  inspection  and  warehouse  question  to  the 
time  of  the  fire  it  is  well  to  consider  other  matters  which  occupied 
the  attention  of  the  Board  and  the  course  of  the  markets  during 
1870.  One  subject  which  concerned  all  the  business  interests  of 
Chicago,  and  for  which  the  Board  of  Trade  made  a  persistent  effort 
was  the  establishment  of  a  system  by  which  imported  goods  could 
be  inspected  and  duties  paid  thereon,  here,  rather  than  at  the  sea- 
board. This  matter  of  justice  to  the  western  cities  had  been  urged 
upon  Congress  for  a  number  of  years.  The  movement  was  opposed 
by  New  York  and  Boston  and  this  opposition  was  resented  by  Chi- 
cago people  who  declared  it  was  only  for  the  purpose  of  hampering 
Chicago  trade  and  that  imported  goods  were  delayed  in  the  custom 
house  from  30  to  90  days.  Secretary  of  the  Treasury  Boutwell  op- 
posed the  bill  on  the  ground  of  added  expense,  claiming  that  smug- 
gling would  be  promoted  thereby.  Philadelphia  papers  joined  in 
the  opposition,  but  in  spite  of  it  all  Chicago,  Cincinnati  and  St.  Louis 


[1870]  OF  THE  CITY  OF  CHICAGO  413 

won  their  point  and  the  "port  of  entry"  bill  passed  Congress  in  July,  /" 
1870.    The  Board  seems  to  have  borne  no  grudge  against  Secretary 
Boutwell,  for  in  April,   1871,  he  was   received  on   'Change  with 
marked  honor,  and  addressed  the  members. 

The  packers'  association  was  affiliated  with  and  largely  under 
the  control  of  the  Board  of  Trade.  The  packing  season  of  1870-1871 
closed  on  March  15,  1871,  but  the  association  agreed  that  it  should 
close  on  February  28th  thereafter.  This  did  not  mean  that  actual 
packing  should  cease  at  that  time,  but  that  all  pork  packed  after 
that  date  should  be  classed  as  "summer  packed"  and  not  be  deliv- 
erable on  contracts  for  regular  pork.  Later  a  committee  of  the 
Board  of  Trade  was  appointed  to  revise  the  rules  concerning  the 
packing  industry.  July  6,  1870,  this  committee  reported  to  a  meet- 
ing of  packers  and  brokers  recommending  the  following  changes ; 
that  the  board  of  directors  appoint  a  committee  of  five  on  provision 
inspection,  that  the  number  of  pieces  must  be  branded  on  each 
barrel  of  mess  pork,  that  the  chief  inspector  should  appoint  sub- 
inspectors  to  visit  daily  each  packing  house  which  is  packing  pork 
and  see  that  all  barrels  were  marked  with  the  proper  date,  etc. 
The  committee  also  recommended  a  system  of  standard  weights ; 
that  a  barrel  must  weigh  200  pounds  net  after  ten  days,  205  pounds 
after  30  days,  210  pounds  after  60  days  and  212  pounds  after  90 
days,  to  be  standard.  This  provision  met  with  much  opposition 
and  aroused  much  discussion.  The  Tribune  said,  editorially,  under 
date  of  July  12,  "Our  provision  market  last  season  was  one  of  the 
most  awkward  affairs  any  man  would  wish  to  meddle  with,  and 
we  have  good  reason  to  believe  that  numerous  orders  were  placed 
elsewhere  because  buyers  of  pork  from  other  places  were  afraid  of 
being  imposed  upon  by  inferior  brands."  The  chief  opposition  was 
on  the  part  of  speculators  who  were  against  the  fixing  of  weights. 
There  was  much  consultation  between  packers  and  dealers  and  it 
was  not  until  Nov.  29,  1870,  that  the  new  rules  were  adopted  by 
the  Board. 

During  the  year  1870  there  were  a  number  of  minor  happen- 
ings of  interest  to  Board  members  and  numerous  resolutions  were 
passed,  showing  the  wide-awake  interest  which  the  Board  of  Trade 
took  in  all  questions  bearing  upon  the  welfare  of  the  commerce 
of  the  country.  In  March  it  was  proposed  to  found  a  mutual  insur- 
ance society  in  connection  with  the  Board,  and  that  upon  the  death 
of  a  member  each  surviving  member  should  pay  $5  to  his  heirs. 
There  is  no  record  that  this  was  acted  upon  at  the  time,  although 
it  was  discussed  somewhat  at  length. 

An  incident  which  well  illustrated  the  high  sense  of  honor 
maintained  by  very  many  of  the  Board  members  occurred  in  April, 
1870,  soon  after  the  annual  election.  J.  B.  Hall  declined  to  serve 
as  a  member  of  the  arbitration  committee  for  the  ensuing  year, 
claiming  that  N.  T.  Wright,  of  the  fi/m  of  Wright  and  Beebe,  was 


414  HISTORY  OF  THE  BOARD  OF  TRADE.  [1870] 

morally  entitled  to  the  office  as  several  votes  were  cast  for  a 
"Wright"  with  initials  not  owned  by  any  member  of  the  Board 
of  Trade.  Commenting  upon  this  action  the  Tribune  said  "The 
controversy  closed  in  a  novel  way,  worthy  of  Damon  and  Pythias. 
J.  B.  Hall  resigned  yesterday,  satisfied  that  the  Board  of  Trade 
intended  to  give  a  majority  of  votes  for  N.  T.  Wright.  Mr.  Wright 
today  refused  the  proffered  honor,  and,  on  his  motion,  Mr.  Hall 
was  requested  to  withdraw  his  resignation.  He  did  so  and  between 
them  the  matter  was  'Hall-Wright.'  " 

In  July  the  Board  petitioned  Congress  for  a  reduction  of  the 
duty  on  salt,  this  being  done  in  the  interest  of  the  packers. 

New  rules  regarding  visitors'  tickets  were  adopted  in  July, 
1870.  Tickets  good  for  any  30  days,  within  three  months,  were  to 
be  sold  at  $5,  good  for  three  months  from  date,  at  $10;  six  months, 
$16;  one  year,  $25.  Visitors'  tickets  for  strangers  might  be  issued 
for  two  weeks  within  any  month,  without  charge.  P.  W.  Dater, 
P.  L.  Underwood,  O.  S.  Hough,  J.  W.  Preston,  and  C.  W.  Wheeler 
were  appointed  delegates  to  a  Southern  Commercial  Convention 
held  in  Cincinnati  in  October,  1870.  They  attended  but  returned 
before  the  convention  adjourned,  being  satisfied  that  it  was  simply 
a  meeting  to  advocate  some  special  interests.  At  the  opening  of 
the  West  Wisconsin  Railway  the  Board  of  Trade  was  represented 
at  the  banquet  at  Eau  Claire  by  Wm.  E.  Richardson  and  S.  T. 
Webster,  and  their  report  to  the  Board  urging  the  Northwestern 
to  extend  its  line  from  Madison  to  Tomah  to  form  a  connection 
with  the  new  road  was  adopted  at  a  meeting  held  October  26.  An 
amusing,  but  to  some  a  costly  incident,  occurred  in  November, 
when  for  some  reason  the  clock  failed  to  strike  at  3  o'clock.  After 
that  hour  deliveries  were  not  "regular"  and  disputes  as  to  time 
made  considerable  financial  difference  to  several  members.  In 
November  the  Board  passed  a  resolution  endorsing  the  building 
of  the  Baltimore  &  Ohio  "Air  Line,"  via  Akron. 

The  spirit  of  the  Exchange  was  still  youthful,  exuberant  and 
at  times  unruly,  and  this  led  the  directors,  December  4,  1870,  to  pass 
the  following  resolution  :  "In  view  of  the  frequent  scenes  of  dis- 
turbance and  disorderly  conduct  by  members  on  'Change,  the  Direc- 
tors will  feel  it  to  be  their  duty  to  exercise  the  power  conferred  upon 
them  by  the  rules  of  the  Board  and  will  suspend  any  member  who 
may  in  future  be  proven  to  have  been  an  active  participant  in  such 
improper  scenes  of  disorderly  conduct  when  on  the  floor  of  the 
Exchange." 

December  4,  1870,  the  "Open  Board"  moved  into  its  new  quar- 
ters and  resolved  upon  higher  rates  for  membership.  The  dues 
were  placed  at  $20  for  a  single  member,  two  members  of  one  firm, 
$30,  and  three  or  more  members  of  the  same  firm,  $40.  Visitors' 
tickets  were  placed  at  $5  per  month.  The  officers  of  the  Open 
Board  were:  President,  Thomas  Whitney;  Vice-President,  H.  C. 


[1870]  OF  THE  CITY  OF  CHICAGO  415 

Ranney ;  Secretary  and  Treasurer,  C.  G.  Cooley ;  Directors,  W.  N. 
Brainard,  F.  M.  Mitchell,  J.  C.  Whitmarsh,  Geo.  J.  Brine  and  H.  H. 
Ross.  The  new  hall,  which  was  in  "Pope's  Block,"  facing  Madison 
Street,  was  dedicated  December  19.  It  was  35x72  ft.  in  size  and 
the  rental  was  $5,000  annually  for  the  first  two  years  and  $6,000 
annually  thereafter.  The  dedication  served  to  bring  the  Open  Board 
and  the  Board  of  Trade  into  closer  touch.  The  speakers  were  Thos. 
Whitney,  president  of  the  Open  Board ;  Charles  Randolph,  S.  H. 
McCrea,  president  of  the  Board  of  Trade ;  Murry  Nelson,  George 
J.  Brine  and  P.  W.  Dater.  Soon  after  this  it  was  proposed  to  con- 
solidate the  two  Boards.  It  was  argued  that  it  would  reduce  ex- 
penses and  give  the  Open  Board  a  charter.  It  was  proposed  that 
the  regular  exchange  be  the  market  for  cash  sales  and  the  Open 
Board  room  be  devoted  to  options.  On  December  22nd  the  Open 
Board  decided  by  unanimous  vote  to  abandon  its  distinctive  organ- 
ization and  turn  over  its  property  and  lease  to  the  Board  of  Trade, 
providing  the  directors  of  the  Board  of  Trade  would  assume  all 
responsibility,  pecuniary  and  otherwise ;  the  money  already  col- 
lected by  the  Open  Board  to  be  returned  to  its  members.  On  the 
24th  the  Board  of  Trade  by  an  almost  unanimous  vote  accepted  this 
proposition,  and  the  two  bodies  were  amalgamated.  One  other 
act  of  importance  was  the  appointment  of  P.  W.  Dater,  Redmond 
Prindiville,  V.  A.  Turpin,  J.  C.  Guthrie  and  Secretary  Randolph  as 
delegates  to  the  National  Board  of  Trade  which  met  at  Buiifalo  on 
December  7th. 

The  year  1870  was  one  of  great  trial  to  all  engaged  in  legiti- 
mate business  in  Chicago.  After  the  close  of  the  war  there  was  a 
steady  subsidence  in  the  excitements  produced  by  that  great  strug- 
gle and  prices  tended  downwards  towards  the  ordinary  ante-bellum 
level,  thus  continually  lessening  the  nominal  value  of  property  held 
by  traders,  when  measured  by  a  currency  of  changing  value,  and 
many  classes  of  goods  actually  declined  on  a  gold  basis  because 
of  greater  production  in  proportion  to  the  demand.  With  each  suc- 
ceeding year  this  pressure  grew  harder  to  withstand  because  it  was 
a  load    added  to  that  which  had  gone  before  it. 

The  market  for  the  first  three  months  of  1870  was  without 
speculative  features  and  prices  were  comparatively  steady.  In 
March  gold  reached  the  lowest  point  for  some  years  and  prices  were 
correspondingly  depressed.  In  April  there  was  a  sudden  rise  in 
values.  Several  members  were  unable  to  meet  their  obligations 
and  this  brought  more  discussion  of  the  question  of  ample  mar- 
gins. The  Tribune  recommended  margins  on  all  deals  to  shut  out 
the  "penniless  scalpers"  who  were  said  to  be  willing  to  take  profits 
but  not  losses.  In  May  the  Chicago  market  was  helped  by  a  r?" 
duction  in  tolls  on  the  Erie  Canal,  the  rate  being  reduced  from 
three  mills  per  thousand  pounds  per  mile  to  one  and  one-half  mills. 
The  elevator  rates  at  Buffalo  were  also  reduced  one  cent  per  bushel 


*: 


.v^ 


416  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

and  these  reductions,  together  with  other  market  conditions, 
brought  wheat  above  the  dollar  mark  for  the  first  time  since  Oct. 
20,  1869,  there  being  a  sharp  rise  of  20c  per  bushel.  By  June, 
drought  in  France  and  England  and  troubles  in  the  Balkans  had 
.created  a  strong  foreign  demand  and  sent  prices  up,  especially  on 
[wheat.  Prices  in  Chicago,  however,  were  abnormally  high,  within 
eight  or  ten  cents  of  New  York  prices,  whereas  the  transportation 
cost  was  22c  per  bushel.  This  caused  the  Chicago  elevators  to  be 
iilled  to  overflowing,  and,  anticipating  lower  prices,  the  banks  re- 
fused to  loan  for  speculative  purposes.  This  caused  a  reaction 
and  the  price  of  wheat  dropped  eleven  cents  the  following  week. 
It  was  reported  that  many  "longs,"  especially  among  out-of-town 
speculators,  lost  heavily  as  they  were  unable  to  forward  margins 
quickly  enough  in  the  face  of  the  rapid  decline.  The  losses  were 
reported  to  have  reached  $300,000  and  several  commission  houses 
were  forced  to  suspend  temporarily.  About  the  10th  of  July,  1870, 
'Came  the  first  rumors  of  the  Franco-Prussian  war.  Although  these 
were  discredited,  as  it  was  generally  thought  that  Prussia  was  in 
no  condition  to  fight,  wheat  prices  advanced  five  cents  on  the  fol- 
lowing day.  The  declaration  of  war  coming  quickly  afterwards 
■caused  a  still  greater  boom  in  prices  and  added  several  cents  more 
to  the  price  of  wheat.  It  was  at  this  time  that  much  wheat  was 
declared  out  of  condition  and  that  the  cries  of  warehouse  frauds 
were  renewed.  The  poor  condition  of  the  old  wheat  in  store,  un- 
settled confidence,  the  rapid  mobilization  of  the  Prussian  army, 
its  invasion  of  France  and  continued  victories  presaged  an  early 
conclusion  of  the  war,  and,  within  a  month  of  the  outbreak  of  hos- 
tilities, prices  were  greatly  depreciated.  The  year  closed  with  prices 
steady  but  with  a  marked  advance  over  the  opening  prices  of  the 
year. 

The  course  of  the  wheat  market  during  this  year  was  a  singular 
one,  the  market  being  depressed  to  an  unusual  extent  during  nearly 
the  whole  year,  except  for  the  sudden  rise  in  the  spring  and  early 
summer,  and  the  short  term  of  about  two  weeks  at  the  breaking 
out  of  the  war  between  France  and  Prussia.  The  price  of  No.  2 
spring  of  the  crop  of  1869  would  scarcely  average  90c  per  bushel, 
and  that  of  1870,  though  of  very  superior  quality,  barely  averaged 
-$1.10,  which  was  very  low  compared  with  the  average  of  the  pre- 
ceding decade,  especially  considering  that  the  wheat  crop  of  the 
United  States  was  fully  21,000,000  bushels  less  than  for  the  year 
1869.  There  was  a  great  contrast  between  the  quality  of  the  two 
•crops  of  spring  wheat.  That  of  1869  was  poor,  particularly  that 
grown  in  the  southern  part  of  the  spring  wheat  region.  Northern 
grown  wheat  was  better  and  this  was  largely  shipped  to  Milwaukee. 
The  difiference  was  such  that  there  was  a  marked  discrimination  in 
eastern  markets  in  favor  of  grain  shipped  from  Milwaukee  and  this 
istill  further  diverted  wheat  to  that  market.    The  inspection  troubles 


[1870]  OF  THE  CITY  OF  CHICAGO  417 

at  Chicago  also  operated  against  it  and  dealers  were  forced  to  call 
their  wheat  "Milwaukee"  in  order  to  get  a  fair  price  for  it. 

Secretary  Randolph  gives  a  very  complete  review  of  the  busi- 
ness conditions  and  the  crop  movements  of  the  year  1870,  and 
portions  of  his  report  are  included  herewith. 

"The  past  year,  like  the  one  preceding  it,  has  not  been  above 
a  moderately  profitable  one  in  most  branches  of  business,  but 
probably  Chicago  had  as  little  to  complain  of  in  this  regard  as  any 
of  the  large  cities  of  the  country.  In  most  kinds  of  merchandise 
and  property,  a  considerable  shrinkage  in  value  has  been  realized, 
largely  incident  to  the  gradual  decline  in  gold ;  or  more  properly 
the  improvement  in  the  real  value  of  our  currency ;  but  it  is  gratify- 
ing to  observe,  that  the  widespread  disaster  that  was  by  many, 
predicted  as  almost  certain  to  follow  our  near  approach  to  the  specie 
standard,  has  not  been  realized,  and  as  we  have  about  half  closed 
the  gap  that  existed  a  year  since  between  currency  and  coin,  it  may 
be  safely  hoped,  that  with  prudence,  we  may  at  the  close  of  the 
present,  or  at  farthest,  the  next  year,  find  the  country  safely  arrived 
at  substantially  a  specie  basis  of  doing  business. 

"In  the  produce  business  the  volume  of  business  has  not  differed 
essentially  from  that  of  the  previous  year,  notwithstanding  the  fact 
that  the  wheat  crop  of  1869,  in  the  northwest,  was  a  light  one,  as 
shown  by  the  aggregate  deliveries,  and  the  corn  crop  of  that  year 
was  the  smallest  since  1863.  In  lumber,  also,  the  trade  has  been 
little  different  from  1869.  Manufacturing  is  steadily  increasing, 
and  seems  to  be  attended  with  satisfactory  results.  The  lack  of 
anything  like  complete  statistics  touching  the  extent  of  manufac- 
turing in  the  city,  is  somewhat  embarrassing,  but  still  sufficient  is 
known  to  justify  the  statement  that  they  are  of  very  respectable 
magnitude,  and  furnish  employment  to  a  large  population.  The 
United  States  census  returns  for  the  past  year  show  a  capital 
employed  in  the  manufactures  of  the  city  of  about  $28,000,000, 
with  value  of  product  amounting  to  over  $60,000,000,  and  persons 
employed,  over  20,000;  but,  as  the  returns,  in  some  respects,  are 
so,  glaringly  erroneous  and  below  the  true  facts,  the  whole  must 
be  accepted  as  at  best  but  an  approximation  to  the  reality.  Several 
new  enterprises  have  been  started  within  the  year,  but  perhaps 
none  that  promise  more  substantial  results  for  the  general  benefit 
of  the  city  than  the  recent  establishment  of  works  for  the  reduction 
and  smelting  of  the  product  of  our  mining  territories.  The  works 
as  yet  in  operation  are,  to  some  extent,  experimental,  but  will,  no 
doubt,  be  enlarged  and  improved,  as  experience  shall  suggest.  Prac- 
tical and  scientific  men  seem  to  demonstrate  satisfactorily,  that  in 
works  of  this  character,  properly  constructed  and  operated,  there 
is  almost  a  certainty  of  very  profitable  returns,  furnishing  employ- 
ment to  many  operatives,  and  bringing  in  its  train  a  large  and 
lucrative  trade  with  the  districts  from  which  the  ore  is  obtained. 
Chicago  is  peculiarly  well  situated  to  avail  herself  of  these  bene- 
fits ;  her  lines  of  communication  penetrate  directly  into  the  mining 
districts,  "and  if  this  city  can  furnish  a  market  for  the  products  of 
those  districts,  at  near   their  intrinsic   value,   the   mining  interest 


418  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

will  be  greatly  stimulated  and  developed,  and  the  city  and  country 
will  be  greatly  enriched.  It  becomes  the  enterprising  capitalists 
of  this  city  to  encourage  and  build  up  this  enterprise,  securing  the 
rich  trade  to  flow  therefrom,  before  it  shall  have  been  diverted  into 
other  channels. 

"In  the  erection  of  new  buildings  there  has  been  somewhat  less 
expenditure  than  in  1869,  but  many  costly  and  elegant  structures, 
both  of  business  houses  and  of  private  residences,  have  been  com- 
pleted or  begun,  and  a  few  years  of  improvement  such  as  has  marked 
the  past  two  or  three  years,  will  place  Chicago  among  the  most 
beautiful  cities  of  the  country.  Prominent  among  the  erections 
completed  or  in  progress  may  be  noticed  several  large  and  elegant 
hotels,  at  least  two  of  which  are  expected  to  rank  fully  equal  to 
any  in  America.  Public  improvements  have  kept  pace  with  the 
general  growth  of  the  city ;  the  water  works,  completed  at  large 
cost  only  some  four  years  since,  with  an  estimated  capacity  equal 
to  the  probable  needs  of  the  city  for  a  generation,  are  found  inade- 
quate even  for  the  necessities  of  today,  though  in  no  degree  falling 
short  of  furnishing  as  large  a  supply  as  was  anticipated,  the  con- 
sumption has  increased  so  much  beyond  the  estimate  of  a  given 
population,  that  to  meet  the  demand  another  tunnel  under  the  lake 
is  projected,  and  will  be  pushed  forward  with  as  little  delay  as 
possible.  The  success  that  attended  the  construction  and  use  of 
one  tunnel  under  the  river  has  justified  the  construction  of  another, 
the  present  one  connecting  the  north  and  south  divisions  of  the 
city  under  the  main  river.  It  is  expected  to  be  fully  ready  for  use 
during  the  coming  spring  or  early  summer.  The  widening  of 
State  street,  south  of  Madison  street,  to  its  proportions  north  of 
that  street,  is  going  forward  with  all  possible  rapidity,  and  when 
completed,  will  make  that  street,  as  a  business  center,  second  to 
none  in  point  of  beauty  or  adaptability  to  trade  in  the  country. 

"No  essential  change  has  occurred  in  the  amount  or  character 
of  our  banking  facilities.  Under  the  provisions  of  the  law,  passed 
at  the  last  session  of  Congress,  authorizing  to  some  extent  a  re-dis- 
tribution of  banking  facilities  under  the  National  Banking  Act,  one 
new  national  bank  has  been  organized  in  this  city,  and  is  in  suc- 
cessful operation,  and  it  is  understood  another  is  about  ready  to 
commence  business.  Money  has  been  reasonably  easy  during  the 
most  of  the  year  at  ten  per  cent  interest  for  ordinary  business  trans- 
actions ;  perhaps  it  is  more  stringent  at  this  time  than  at  any  time 
during  the  year,  but  this  is  believed  to  be  but  temporary,  and  is 
largely  owing  to  the  heavy  amounts  required  to  carry  on  the  pack- 
ing business,  now  at  its  height  and  very  active. 

"The  business  of  the  Clearing  House  for  the  year  shows  a  grati- 
fying increase.  The  entire  amount  of  clearings  for  1870  was  $810,- 
676,036.28:  for  1869  it  was  $731,444,111.11,  an  increase  of  $79,231,- 
925.17.  These  figures  represent  the  amount  of  checks  on  one  bank 
deposited  with  another,  and  are  not  a  very  close  approximation  to 
the  entire  banking  business  of  the  city. 

"The  census  returns  of  population  in  the  city,  while  falling 
somewhat  short  of  the  estimate  of  some,  are  highly  flattering,  show- 
ing a  population  of  299,227  against  110,973  in  1860,  an  increase  of 


[1870]  OF  THE  CITY  OF  CHICAGO  419 

169  per  cent  in  ten  years,  and  this,  too,  without  the  absorption 
during  that  time  of  any  suburban  villages  or  cities,  as  has  been  the 
case  in  regard  to  some  other  large  cities.  The  state  of  Illinois  has 
increased  from  a  population  of  1,711,951  in  1860  to  2,527,910  in 
1870,  an  increase  of  48  per  cent.  The  flour  trade  has  been  depressed 
and  lifeless  for  almost  the  entire  year.  Millers  have  made  less  flour 
and  probably  at  a  less  profit  than  in  1869,  and  that  was  by  no  means 
a  lucrative  year's  business.  It  is  a  noticeable  fact  that  the  produc- 
tion of  flour  in  this  city  shows  a  decline  in  both  the  past  two  years, 
and  the  falling  off  in  receipts  from  the  interior  is  also  quite  marked. 
This  cannot  be  attributable  to  the  lack  of  wheat  from  which  to 
manufacture  it,  as  our  receipts  of  wheat  have  steadily  increased, 
but  the  relative  prices  for  flour  and  wheat  have  been  in  favor  of 
the  latter.  This  is  almost  always  the  case  when  there  is  any  con- 
siderable demand  for  the  export  of  breadstufTs,  shippers  to  Europe 
seeming  to  prefer  the  grain.  Our  city  millers  have  labored  under 
somewhat  of  a  disadvantage  in  that  under  our  present  system  of 
handling  grain  they  have  usually  been  obliged  to  pay  a  storage 
charge  on  their  wheat,  the  custom  prevalent  a  few  years  since  of 
sending  choice  samples  of  wheat  to  market  in  bags,  having  almost 
entirely  ceased,  the  difference  obtainable  by  sample  not  justifying 
the  increased  expense  over  the  cost  of  shipping  in  bulk.  It  is  hoped 
that  different  arrangements  in  regard  to  the  delivering  of  grain 
in  bulk  may  be  inaugurated  at  an  early  day,  and  that  millers  and 
others  desiring  to  receive  grain  from  the  cars  directly,  may  be  per- 
mitted to  do  so  either  on  track,  or  that  it  may  be  delivered  to  them, 
when  it  is  possible  to  do  so  at  their  mills,  or  other  places  of  storage. 

Wheat 

"The  receipts  of  wheat  for  the  year  have  been  17,394,409  bushels, 
over  500,000  bushels  in  excess  of  1869,  and  more  than  any  previous 
year  in  the  history  of  Chicago.  The  amount  received  from  the  crop 
of  1869,  from  January  1st  to  August  1st,  was  less  than  was  antici- 
pated a  year  since.  The  quality  did  not  improve  with  the  later 
deliveries,  and  in  fact  but  a  comparatively  small  percentage  of  the 
wheat  received  here,  prior  to  the  new  crop,  was  in  strictly  sound 
condition.  Large  quantities  were  stored  in  the  interior,  especially 
at  points  on  the  upper  Mississippi  River,  during  the  winter.  This 
came  forward  in  May  and  June,  and  proved  to  be  in  doubtful  con- 
dition ;  much  of  it  not  actually  damaged,  but  of  a  character  likely 
to  injure  when  stored  in  large  quantities  during  the  warm  weather. 
Prices  were  maintained  in  this  market  at  a  point,  considering  the 
condition  of  the  property,  that  caused  buyers  for  shipment  to  act 
cautiously  and  slowly,  hence  the  stock  in  store  was  kept  up  from 
1,750,000  to  2,000,000  bushels,  until  after  the  middle  of  July,  and 
a  large  portion  of  this  had  remained  in  bins  for  from  six  to  eight 
months.  About  the  middle  of  July,  some  of  the  wheat  in  store 
began  to  show  decided  signs  of  heating,  and  from  time  to  time 
thereafter,  considerable  quantities  of  it  were  posted  as  being  more 
or  less  damaged  ;  the  prices  for  such  was  greatly  depreciated  from 
the  current  price  of  that  supposed  to  be  in  fair  condition,  and  was 
finally  worked  off  by  degrees,  in  some  cases  at  a  ruinous  loss. 


420  HISTORY  OF  THE  BOARD  OF  TRADE  [18701 

"The  crop  of  spring  wheat  for  1870,  while  probably  not  a  large 
one,  is,  compared  with  that  of  1869,  of  very  superior  quality.  The 
receipts  since  August  1st  have  been  10,209,044  bushels,  correspond- 
ing time  last  year,  7,610,926  bushels.  Many  familiar  with  the  facts 
estimate  that  a  larger  percentage  than  usual  has  been  marketed 
during  the  autumn  months,  and  hence  conclude  that  our  receipts 
hence  to  August  1st  will  be  no  larger  than  last  year.  The  high 
character  of  the  wheat  received  at  this  point  since  August,  has 
sensibly  improved  the  reputation  of  Chicago  as  a  desirable  market 
in  which  to  purchase ;  and  whatever  of  discredit  previously  attached 
to  our  market  in  this  regard  has  passed  away.  The  winter  wheat 
crop  of  1870,  in  the  west,  was  not  equal  to  that  of  1869,  and  many 
points  that  last  year  had  a  local  surplus  are  now,  or  are  likely  to  be, 
purchasers  in  our  market  for  consumption ;  and  the  depressing 
influence  of  the  presence  in  the  eastern  markets  of  large  quantities 
of  winter  wheat  is  no  longer  felt.  The  export  demand  has  been 
fair  during  a  portion  of  the  year,  and  in  view  of  the  necessary  waste 
of  war  between  the  immense  armies  of  two  powerful  nations  now 
in  progress  in  Europe,  and  the  fact  that  the  European  wheat  crops 
were  at  best  only  moderately  fair,  it  may  be  fairly  inferred  that  a 
reasonably  good  demand  is  likely  to  exist  for  all  the  wheat  the 
United  States  may  have  to  spare  until  another  harvest.  The  Agri- 
cultural Bureau  at  Washington  estimates  the  product  of  the  prin- 
cipal wheat  producing  states  as  considerably  less  than  in  1869. 
Prices  at  the  close  of  the  year  are  strong  at  108  to  109  cents  for 
No.  2  spring  and  many  predict  a  much  higher  range  before  spring." 

Com 

The  corn  crop  of  1869,  at  the  West,  was  small  in  quantity  and 
generally  of  inferior  quality,  yielding  a  less  surplus  for  market 
than  was  anticipated  a  year  since.  The  receipts  at  this  point  for 
the  year  were  20,189,775  bushels  and  the  shipments  \7,777,Z77; 
the  receipts  being  more  than  3,000,000  bushels  less  than  the  preced- 
ing year,  the  loss  being  chiefly  in  receipts  by  canal.  Considerable 
amounts  from  the  Illinois  River  were  shipped  to  St.  Louis  to  meet 
the  demand  of  the  southern  states.  Prices  throughout  the  year 
were  uniform,  gradually  lowering  as  the  new  crop  came  in.  In- 
creased distilling  made  a  larger  city  demand,  but  the  export  trade 
was  small,  the  needs  of  this  country  demanding  all  the  surplus  of 
the  corn  producing  states  at  a  price  which  would  not  admit  export. 
Rail  shipments  to  New  England  and  other  eastern  points  were 
large  and  those  to  New  York  comparatively  small.  Corn  was  kept 
in  good  condition  and  there  was  little  speculative  excitement,  the 
trade  being  more  healthy  and  satisfactory  than  during  1869.  The 
Tribune,  in  its  resume  of  trade  for  the  year,  stated  that  "The  corn 
crop  of  the  past  year  (1870)  is  an  immense  one,  though  it  is  reported 
to  have  suffered  somewhat  in  the  east  and  in  Kansas  and  Nebraska. 
The  quality  is  excellent.  A  better  crop  has  never  been  raised  in 
the  United  States,  and  the  dry  weather  has  been  peculiarly  favor- 
able to  it,  while  the  absence  of  early  frost  prevented  injury."  The 
Agricultural  Bureau  estimated  the  crop  at  over  1,100,000,000  bushels 
as  against  884,000,000  in  1869,  the  principal  increase  being  in  the 
western  states. 


[1870]  OF  THE  CITY  OF  CHICAGO  421 

Oats 

The  oat  crop,  which  amounted  to  about  288,000,000  bushels  in 
the  whole  United  States  in  1869,  fell  off  to  the  extent  of  about  five 
per  cent  in  1870,  the  decrease  being  largely  in  the  West.  Receipts 
at  Chicago  were  10,472,078  bushels  as  against  10,611,940  in  1869. 
Shipments  were  8,507,735  as  compared  with  8,800,646  the  year  be- 
fore. Prices  ruled  low  and  generally  dull  and  there  was  practically 
no  excitement  in  the  market  during  the  year. 

Rye 

Rye  receipts  for  1870  were  1,093,493  bushels,  and  in  1869, 
955,201.  Shipments,  1870,  913,629;  1869,  798,744.  Trade  was  dull 
and  lifeless  and  the  local  demand  small,  distillers  using  inferior 
grades  of  wheat,  instead  of  rye  to  a  considerable  extent. 

Barley 

But  little  Canadian  barley  was  shipped  to  this  market,  although 
the  year  before  the  barley  from  Canada  amounted  to  several  hun- 
dred thousand  bushels.  Receipts  were,  in  1870,  3,335,653  bushels; 
in  1869,  1,513,110  bushels.  Shipments,  in  1870,  2,584,692;  in  1869, 
633,753  bushels.  The  crop  of  1870  proved  the  largest  and  best 
ever  grown  in  the  West.  Immediately  after  harvest,  the  quality 
of  our  barley  being  known  to  be  good,  and  under  reports  of  a 
reduced  yield  in  Canada  and  New  York,  prices  were  rapidly  ad- 
vanced from  about  $1.05,  the  price  of  new  No.  2,  on  August  1st, 
to  $1.16  on  August  26th.  About  this  time  the  fact  developed  that 
large  quantities  of  malt  remained  on  hand  at  the  East;  that  the 
Canadian  crop  was  better  than  anticipated,  and  that  the  western 
crop  had  been  underestimated  in  quantity,  thereupon  the  price 
steadily  decreased  until  80  cents  was  reached  in  October,  after 
which  the  market  ruled  comparatively  steady,  although  declining, 
the  price  December  31st  being  68@70  cents. 

Provisions 

The  market  for  pork  product  since  the  beginning  of  the  year 
has  been  marked  by  a  steady  and  healthy  demand.  Stocks  have 
been  light  at  all  prominent  points,  and  the  consumptive  require- 
ments have  gradually  absorbed  the  offerings,  so  that  at  the  begin- 
ning of  the  present  packing  season  all  markets  were  nearly  bare. 
The  newly  packed  product  has  found  ready  purchasers,  though  at 
lower  and  declining  rates.  Meats  only  partly  cured  have  been 
taken  promptly,  not  only  by  purchasers  for  Eastern  and  Southern 
markets,  but  the  low  prices  have  called  out  orders  for  considerable 
shipment  to  Europe,  and  it  now  seems  quite  probable  that  the  sea- 
son's product,  however  large  it  may  be,  will  find  a  market  at  or 
above  the  range  of  prices  current  at  the  close  of  the  year.  The 
number  of  hogs  to  be  received  here  during  the  present  packing 
season  promises  to  be  considerably  larger  than  last  season,  while 
the  weight  will  be  above  the  average  of  last  year,  probably  to  the 
extent  of  18  to  20  per  cent.  The  large  crop  of  corn  has  stimulated 
free  feeding,  especially  at  points  remote  from  market,  as  the  corn 


422  HISTORY  OF  THE  BOARD  OF  TRADE  [1870] 

is  likely  to  net  a  better  price  converted  into  pork  than  in  any  other 
way.  So  far  as  present  indications  point  to  probabilities,  it  appears 
that  Chicago  is  likely  to  pack,  the  present  season,  a  larger  per- 
centage of  the  entire  hog  crop  than  for  several  seasons  past.  The 
number  of  hogs,  live  and  dressed,  received  during  1870  was  1,953,- 
372;  in  1869,  1,852,382. 

Beef  packing  has  dwindled  into  comparative  insignificance  in 
this  city,  but  during  the  past  season  large  numbers  of  cattle  have 
been  slaughtered  by  Chicago  packers  at  Kansas  City  and  other 
points  convenient  to  the  pasturage  grounds  of  cattle.  The  receipts 
of  cattle  have  been  532,964  head ;  in  1869,  403,102  head. 

Relative  to  lumber  the  secretary  stated  trade  had  improved 
and  been  more  profitable  on  account  of  cheaper  production.  The 
production  of  highwines  was  also  in  excess  of  any  the  city  had 
known,  but  the  secretary  urges  a  rebate  of  the  tax  for  liquors 
exported  as  necessary  to  encourage  manufacture.  The  wool  mar- 
ket was  quoted  as  dull,  and  hides  about  the  same  as  the  year  previ- 
ous, but  with  lower  prices. 

Relative  to  transportation  the  secretary  said :  "Freights  by 
rail  eastward  have  ruled  moderately  low  during  the  season,  but 
have  not  touched  as  low  a  figure  as  during  1869.  Lake  freights  have 
been  at  about  the  same  range  as  last  year.  The  tolls  on  the  Erie 
Canal  were  reduced  nearly  one-half  on  grain  last  spring,  which 
caused  an  increase  to  some  extent  in  the  shipments  by  that  route, 
but  as  but  little  corn  was  shipped  to  New  York  City,  and  for  a 
good  portion  of  the  summer  shippers  were  afraid  to  risk  our  spring 
wheat  in  boats  for  ten  days  to  two  weeks,  large  amounts  were  sent 
by  rail  that  would  have  gone  by  canal  had  the  condition  of  the 
grain  been  as  good  as  usual. 

— ^  The  people  of  New  York,  at  the  last  state  election,  decided  ad- 
versely to  a  proposition  submitted  for  so  amending  their  constitu- 
tion as  to  permit  a  refunding  of  the  canal  debt  of  the  state  in  a 
manner  that  would  permit  a  reduced  toll-sheet  to  pay  off  the  debt 
at  the  maturity  of  the  extension  rather  than  requiring  the  full  pay- 
ment at  early  maturity.  It  is  believed  that  the  exact  nature  of 
the  proposition  was  not  understood  by  the  people,  and  that  under 
a  more  full  discussion  of  the  subject  a  different  result  would  be 
obtained.  It  is  uncertain  as  yet  whether  the  tolls,  as  fixed  last 
spring,  will  remain  for  the  coming  season,  or  whether  they  may 
be  put  back  to  the  previous  rates.  It  would  seem  to  be  a  pretty 
well  established  fact  that  at  those  rates  the  canal  can  illy  compete 
with  rail  transportation,  especially  with  the  present  size  of  the  locks. 
And  unless  the  people  of  that  State  are  disposed  to  adopt  a  liberal 
policy  in  reference  to  their  canals,  they  will  be  apt  to  find,  at  no 
distant  day,  the  revenues  diminished  and  their  debt  still  unpaid. 
The  Canadian  Government  seems  to  be  waking  up  to  the  fact  that 
they  hold,  to  a  considerable  extent,  the  key  to  the  situation,  so  far 
as  the  lake  interest  is  concerned,  and  it  is  hoped,  and  confidently 
expected,  that  liberal  measures  will  be  adopted  at  the  approaching 
session  of  the  Dominion  Parliament.  If  the  West  can  secure  access 
to  Lake  Ontario  for  our  largest  vessels,  there  would  at  once  be 
opened  means  of  transit  from  thence  to  all  points,  including  New 


[1871]  OF  THE  CITY  OF  CHICAGO  423 

York  City,  at  a  material  reduction  from  rates  hitherto  current,  a 
large  portion  of  which  would  innure  directly  to  the  benefit  of  west- 
ern farmers.  But  little  further  reduction  can  be  hoped  for  on  rates 
hence  by  rail  to  the  seaboard ;  certainly  not,  unless  water  communi- 
cation forces  rates  down  by  competition.  The  projected  canal  from 
the  St.  Lawrence  River  to  Lake  Champlain  merits  the  encourage- 
ment of  all  desiring  the  cheapest  and  best  means  of  communication 
to  New  York  ;  and  the  proposed  new  canal  around  the  Falls  of  Niag- 
ara, on  the  Canada  side,  is  a  work  in  which  every  western  man 
must  feel  the  liveliest  interest. 

"The  Baltimore  &  Ohio  Railroad  managers  have  projected  a  new 
line  from  Pittsburgh  to  this  city,  and  that  enterprise  promises  great 
advantages  to  this  city  and  the  West.  It  is  expected  that  the  line 
will  be  in  operation  within  two  years.  A  new  line  hence  to  Minne- 
sota, in  connection  with  the  Chicago  &  Northwestern  Railroad,  is 
being  rapidly  pushed  to  completion ;  this  will  be  of  immense  advan- 
tage to  this  city,  as  hitherto  our  most  direct  lines  in  that  direction 
have  been  largely  tributary  to  a  corporation  centering  in  Milwau- 
kee ;  this  resulted  in  better  rates  for  grain  and  flour  to  Milwaukee 
than  to  this  city,  and  so  much  of  Minnesota  business  as  has  come 
to  Chicago  has  been  obliged  to  encounter  this  unfavorable  compe- 
tition. This  is  particularly  true  in  regard  to  flour,  and  everything 
else  being  equal,  the  shipper  to  Milwaukee  has  had  about  ten  cents 
the  barrel  the  advantage  over  the  shipper  to  Chicago ;  neverthe- 
less, as  other  things  have  not  been  equal,  Chicago  has  held  a  fair 
share  of  the  trade.  The  practice  of  issuing  bills  of  lading  at  through 
rates  from  remote  interior  points  to  Eastern  cities  at  less  than  the 
property  can  be  shipped  to  Chicago  and  thence  eastward  for,  has 
worked  against  our  interests,  and  our  Western  roads  ought  not  to 
be  parties  to  a  policy  so  manifestly  unjust  to  the  city  that  so  largely 
supplies  them  with  the  bulk  of  their  business." 

1871 

The  year  1871  opened  with  fair  business  prospects  and  with  a 
steady  but  advancing  market.  The  attention  of  the  members,  other 
than  that  given  to  business  transactions,  was  directed  during  the 
first  months  of  the  year  very  largely  toward  the  warehouse  ques- 
tion and  the  McChesney-Denton  sensation,  which  has  already  been 
related.  The  Franco-Prussian  war  was  still  in  progress,  but  the 
outcome  was  then  a  foregone  conclusion,  and  the  news  of  the  fall 
of  Paris,  received  in  January,  only  served  to  strengthen  the  market. 
An  echo  of  the  war  was  the  appropriation  of  $5,000  by  the  Board 
for  the  relief  of  the  distress  in  France. 

On  February  21st,  A.  P.  B.  Scolly  resigned  as  weighmaster 
and  Calvin  Carr  was  appointed  in  his  place,  to  take  efifect  March  1. 
A  dispute  arose  between  the  vessel  owners  and  the  Chicago  Towing 
Association,  and  the  former  agreed  to  patronize  a  proposed  opposi- 
tion towing  line,  which  agreed  to  charge  less  than  the  rate  in  force 
in  1869.  &nother  question  which  greatly  interested  the  members 
was  the  optning  of  the  Illinois  &  Michigan  Canal.     This  had  been 


424  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

closed  for  improvements  early  in  the  previous  season  and  the  mem- 
bers of  the  board  felt  that  the  opening  was  being  delayed.  A  com- 
mittee consisting  of  G.  W.  Adams,  Edward  Hempstead  and  H. 
Spruance  was  appointed  to  confer  with  the  canal  commissioners, 
and  it  was  reported  that  the  canal  would  be  opened  April  15.  This 
was  not  satisfactory  to  the  Board  and  on  March  24,  the  Board  of 
Public  Works  was  petitioned  to  open  the  canal  as  speedily  as 
possible. 

The  election  of  April,  1871,  was  unexciting,  J.  W.  Preston  win- 
ning by  a  comfortable  margin  over  his  opponent,  G.  M.  How. 
Other  officers  elected  were  Charles  E.  Culver,  First  Vice  President ; 
William  N.  Brainard,  Second  Vice  President ;  Josiah  Stiles,  J.  H. 
Dwight,  I.  P.  Rumsey,  A.  M.  Wright  and  I.  N.  Ash,  Directors. 
Charles  Randolph  was  again  made  Secretary ;  Orson  Smith,  Treas- 
urer, and  Charles  Hitchcock  was  chosen  as  attorney.  The  member- 
ship was  1,272,  the  receipts  $106,804,000  and  the  expenditures  $104,- 
347,000.  The  assets  were  given  as  $16,393,  and  the  expenditures, 
including  a  balance  of  $1,931,  paid  on  the  soldiers'  monument.  At 
the  annual  meeting  the  delegates  to  the  National  Board  of  Trade 
made  their  report,  stating  that  the  national  body  had  passed  reso- 
lutions favoring  the  giving  of  "clean"  bills  of  lading  for  grain  in 
bulk  by  railroad ;  approving  and  recommending  the  cental 
system  of  weight ;  the  abolishment  of  all  laws,  state  and 
municipal,  that  restrict  interstate  commerce ;  the  establish- 
ment of  a  department  of  commerce  by  the  general  Govern- 
ment; the  repeal  of  the  franking  privilege;  the  revision  of  the 
tarifif,  and  the  reduction  of  duties  to  a  revenue  standard ;  civil 
service  reform,  the  early  return  to  a  specie  basis ;  the  abolishment 
of  usury  laws  and  the  improvement  of  navigable  rivers  by  the 
General  Government. 

The  margin  fund  had  by  this  time  grown  to  considerable  pro- 
portion and  the  disposition  of  this  fund  was  said  to  have  been  one 
of  the  controlling  factors  in  the  election.  It  was  estimated  that 
the  average  amount  held  in  margins  was  about  $100,000,  and  the 
question  was  who  should  control  this  money  and  what  interest 
should  be  paid  for  its  use.  It  was  decided  that  the  treasurer  should 
pay  5  per  cent  to  depositors  of  margins  and  should  give  a  bond 
of  $500,000.  In  May  the  Franco-Prussian  war  came  to  an  end 
and  on  the  19th  the  Board  voted  to  adjourn  on  the  29th  to  join  in 
the  celebration  of  "European  peace  day."  In  the  meantime,  O.  L. 
Parker  had  been  appointed  Chief  Grain  Inspector,  which  position 
he  held  until  the  new  law  placed  the  inspection  of  grain  under  state 
control. 
jftk  Despite  the  protests  of  the  Board  of  Trade  over  the  delay,  it 

txlwas  not  until  July  15  that  the  ringing  of  the  court  house  bell  an- 
^     \nounced  that  the  canal  gates  had  been  opened  and  the  waters  of 
the  south  branch  permitted  to  run  into  the  waterway  on  its  route  to 


[1871]  OF  THE  CITY  OF  CHICAGO  425 

the  Gulf  of  Mexico.    The  announcement  was  received  on  'Change 
with  enthusiastic  cheers. 

The  first  real  sensation  on  'Change,  in  what  had  been  rather  a 
humdrum  year,  occurred  July  15.  Speaking  of  the  market  for  that 
day,  the  "Tribune"  said :  "There  was  more  excitement  on  'Change 
today  than  for  a  long  time  past,  owing  to  a  notable  weakness  in 
wheat,  corn  and  rye  and  an  irregular  sharp  advance  in  oats.  So 
many  marked  changes  in  quotations  have  not  been  known  for 
a  long  time  and  the  feeling  was  quite  panicky  at  times."  On  July 
19  the  "Tribune"  added :  "The  great  difference  in  wheat  and  oats 
between  the  prices  paid  for  delivery  this  month  and  those  charged 
for  seller  August  (amounting  to  seven  cents  on  wheat  and  five  cents 
on  oats)  has  given  rise  to  the  cry  of  'corner,'  and  it  was  stated  ^  <•  A 
today  that  an  attempt  would  be  made  to  re-eflfect  the  passage  of  the  -;  0.  1\ 
old  Rule  13  which  was  abolished  last  October,  being  found  to  be  -  KJA'^^'^ 
impracticable.  .  In  other  words,  parties  who  have  sold  grain  which 
they  did  not  Own  want  to  be  relieved  from  the  responsibility  of 
their  own  acts,  though  they  would  have  been  perfectly  willing  to 
take  the  profits  if  the  market  had  gone  in  their  favor."  The  motion 
above  referred  to  was  introduced  before  the  Board  and  created 
controversy.  Prominent  parties  in  Buffalo  took  the  matter  up  and 
gave  notice  that  they  would  cease  to  trade  in  the  Chicago  market 
if  the  rule  was  re-enacted.  The  motion  was  laid  over  for  ten  days. 
On  July  19,  S.  H.  McCrea  introduced  a  resolution  stating  that  the 
proposal  at  that  time  to  re-enact  Rule  13  could  only  be  construed 
as  an  attempt  to  injure  parties  who  would  be  affected  by  its  passage 
and  would  reflect  upon  the  commercial  honor  of  the  Board,  and 
asking  that  the  notice  posted  be  removed  and  the  consideration  of 
the  motion  indefinitely  postponed.  No  action  was  taken  on  this 
motion,  but  such  sentiment  was  developed  that  the  proposal  to 
re-enact  Rule  13  was  withdrawn. 

The  corner  culminated  the  last  of  July,  and  speaking  of  the 
session  of  August  2nd,  the  "Tribune's"  market  reporter  said :  "To- 
day was  one  of  the  most  excited  ever  known  in  the  history  of  the 
produce  markets  in  this  city  since  the  days  of  the  war,  almost  to 
be  compared  to  Black  Friday.  The  cause  was  the  general  call  for 
margins  of  the  part  of  short  sellers  and  large  margins  at  that.  The 
call  was  widely  responded  to,  fully  $2,000,000  being  deposited  with 
the  treasurer  of  the  Board  of  Trade  before  eleven  o'clock.  There 
has  been  a  shrinkage  of  $3,000,000  in  the  value  of  farm  products  in 
this  market  during  the  past  month,  but  in  spite  of  this  there  ha-J 
been  scarcely  a  single  failure." 

During  the  summer  of  1871  there  were  two  events  relative  to 
the  foreign  trade  which  should  be  mentioned.  A  shipment  of  provi- 
sions for  England,  leaving  Chicago  July  10,  via  Boston,  arrived  at  _--^ 
Liverpool,  July  26,  this  being  a  record  trip  at  that  time ;  also  the  \J^'\\^ 
first  carload  of  goods  in  bond  reached  Chicago  about  August  15 


V 


426  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

thus  showing  that  the  western  cities  had  won  their  fight  against 
customs  delays. 

The  new  State  inspection  made  a  ruling  that  mixed  or  "doc- 
tored" grain  must  be  graded  as  of  the  lowest  of  its  ingredients, 
and  this  aided  to  some  extent  the  combination  which  again  cor- 
nered the  wheat  market  for  the  first  half  of  Augnist.  The  combi- 
nation was  a  strong  one  and  had  complete  control  of  the  market. 
On  August  15  it  was  reported  that  agents  of  the  combine  were 
buying  all  wheat  ofifered  at  $1.12  and  offering  to  sell,  in  settlement, 
at  $1,091^.  J.  H.  Marshall  again  oiTered  Rule  13  as  an  amendment, 
and  S.  H.  McCrea  again  opposed  it.  There  was  much  feeling,  but 
the  majority  seemed  of  the  opinion  that  the  losers  must  ''pay  up 
or  quit." 

"  Having  been  moderately  successful  in  its  operations  in  the 
first  half  of  August,  the  combination  decided  to  carry  the  deal 
along  until  the  last  of  the  month.  Several  million  bushels  of  No.  2 
spring  wheat  were  bought  from  different  parties  for  August  de- 
livery. The  combine  already  held  all  the  wheat  here  and  by  buying 
all  the  current  receipts  they  hoped  to  make  the  shorts  settle  at 
their  own  figures.  On  August  29,  wheat  for  August  delivery  was 
15  cents  higher  than  September  wheat.  The  shorts  made  every 
possible  effort  to  meet  the  emergency.  Every  railroad  was  rushed 
with  trainloads  of  wheat,  large  quantities  were  purchased  in  Mil- 
waukee and  one  vessel  was  so  heavily  loaded  that  it  grounded  in 
the  Chicago  harbor.  On  the  30th  the  price  continued  to  rise,  the 
combine,  however,  selling  to  millers  at  five  cents  under  the  market. 
On  the  31st  the  price  was  $1.29^@1.30,  at  which  latter  price  the 
manipulators  had  determined  to  settle.  At  this  time  one  of  their 
representatives  on  'Change  offered  to  settle  any  quantity  wanted  at 
$1.30.  A  prominent  operator  quickly  said  that  he  would  take  two 
million  bushels.  The  agent  received  this  as  a  joke,  but  the  oper- 
ator insisted  that  it  was  a  fair  trade  and  that  the  grain  must  be 
actually  delivered  that  day.  This  was  a  physical  impossibility,  as 
the  combine  held  less  than  a  half  million  bushels  of  spot  wheat,  and 
they  were  forced  to  turn  to  the  bear  side  of  the  market.  Their 
holdings  were  ordered  sold  and  the  market  quickly  broke  to  $1.10, 
just  at  the  time  when  the  majority  were  expecting  the  price  to 
reach  $1.50.  The  ring  made  an  estimated  profit  of  more  than 
$200,000.  Among  the  losers  were  those  who  paid  $1.14@1.15  for 
wheat  in  Milwaukee,  transported  it  to  Chicago  and  sold  at  $1.12. 
This  corner  was  bitterly  commented  upon  by  the  Chicago  papers. 
It  was  said  that  vessels  were  standing  idle  in  the  harbor  because 
shippers  could  not  pay  the  speculative  price,  and  many  mills  were 
closed  and  others  forced  to  run  on  half  time.  There  was  also  the 
usual  effort  to  re-enact  Rule'  T3'. 

In  August  the  courts  handed  down  a  decision  which  was  a 
severe  blow  to  those  who  hoped  to  see  competition  in  the  elevator 


{1871]  OF  THE  CITY  OF  CHICAGO  427 

business,  in  the  case  of  Hempstead  vs.  the  Chicago  &  Alton  Rail- 
road. The  decision  was  that  a  railroad  was  obliged  to  deliver 
grain  to  any  elevator  reached  by  its  own  tracks,  but  was  not  obliged 
to  enter  into  any  arrangement  to  deliver  over  the  tracks  of  another 
road. 

August  31  the  motion  to  rehabilitate  Rule  13  was  voted  down, 
but  when,  a  week  later,  the  directors  proposed  a  general  recodifica- 
tion and  consolidation  of  the  rules,  with  the  election  to  be  changed 
from  April  to  January,  there  was  opposition  on  the  ground  that 
Rule  13  would  again  be  introduced.  Nevertheless,  the  rules  were 
amended  substantially  as  the  directors  suggested  on  September  19. 
Among  the  changes  were  the  omission  of  the  section  of  Rule  5 
demanding  that  suspensions  be  made  public,  and  insertion  of  a 
suspension  clause  for  personal  misconduct.  Relative  to  margins, 
the  new  rules  provided  that  they  could  not  be  demanded  to  exceed 

10  per  cent  of  the  values  on  the  day  demand  was  made,  and  that 
the  party  called  on  for  margins  was  entitled  to  any  difference  in 
his  favor  between  the  market  price  and  the  contract  price.  A 
deposit  made  to  equalize  the  contract  price  with  the  market  price 
was  to  be  considered  as  a  deposit  for  security  and  not  as  a  margin. 
Calls  for  margins  must  be  responded  to  within  the  next  banking 
hour,  except  when  call  was  made  during  the  exchange  hours,  from 

11  a.  m.  to  1  p.  m.,  the  deposit  must  be  made  before  2  p.  m.  of  the 
same  day.  Among  other  actions  of  the  Board  were  the  unanimous 
passage  of  a  resolution  in  favor  of  the  Niagara  Canal  and  the  refusal 
to  appropriate  $2,000  to  help  pay  the  deficit  of  $2,900  incurred  by 
the  Swine  Exhibit.  As  if  in  prophecy  of  the  great  conflagration 
soon  to  come,  the  Burlington  warehouse  burned  October  1  with 
a  loss  of  $600,000. 

Then  came  the  great  fire,  the  history  of  which  is  burned  into 
the  memory  of  every  Chicagoan.  The  story  has  been  told  so  often 
that  it  is  not  the  intention  to  repeat  it  here  save  as  it  afifected  the 
Board  of  Trade  as  an  organization.  The  fire  of  October  8  was  by 
far  the  greatest  Chicago  had  ever  known,  and  it  alone  was  an 
appalling  disaster,  but  the  "Tribune"  speaks  of  it  not  as  an  over- 
whelming calamity  but  as  if  it  was  well-nigh  under  control.  Within 
the  next  two  days  the  whole  heart  of  Chicago  was  a  mass  of  ruins. 
In  considering  the  state  of  the  Board  of  Trade  it  must  be  remem- 
bered that  the  loss  of  the  exchange  building  with  its  records  and 
its  sacred  mementoes  was  not  the  chief  loss  sustained  by  its  mem- 
bers. Practically  all  of  them  had  offices  in  the  neighborhood  of 
the  Chamber  of  Commerce  Building,  and  all  their  private  records 
and  the  books  of  their  business  were  destroyed.  Their  bank  de- 
posits were  locked  in  red-hot  vaults  from  which  no  one  could  tell 
in  what  condition  they  would  be  taken.  Many  of  the  members 
lived  within  the  fire  zone  and  they  were  homeless,  without  food, 
and  with  little  more  than  the  clothes  on  their  backs.     There  have 


•428  HISTORY  OF  THE  BOARD  OF  TRADE  [18711 

been  in  history  many  of  these  great  and  overwhelming  catastrophes 
of  war  and  pestilence  and  sudden  calamity,  and  if  any  proof  were 
needed  that  God  made  man  in  His  own  image  it  could  be  found  in 
the  way  such  terrible  disasters  transform  men  into  heroes.  The 
smoke  had  not  rolled  away,  the  embers  were  still  red,  fitful  flames 
still  lighted  the  blackened  ruins,  when  the  first  newspaper  printed 
in  Chicago  after  the  fire  published  the  call  for  a  meeting  of  the 
Board  of  Trade.  The  meeting  was  held  October  10,  1871,  at  51-53 
South  Canal  Street,  and  the  first  and  only  business  transacted  was 
the  appointment  of  a  relief  committee  of  one  hundred.  President 
Preston  was  the  chairman  of  the  committee ;  J.  C.  Wiswell,  secre- 
tary, and  the  executive  committee  consisted  of  V.  A.  Turpin,  Moses 
Jones,  Ammi  Bennett,  T.  H.  Seymour  and  O.  W.  Clapp,  and  back 
of  them  stood  the  one  hundred,  and  back  of  them  every  member 
of  the  Board  of  Trade.  It  was  quick,  emergency  work,  worthy 
of  the  great  institution  and  of  the  great,  grief-stricken  city.  Not 
only  was  this  important,  but  the  Board  had  a  great  economic  func- 
tion to  perform.  It  was  the  business  agent  of  the  entire  West,  and 
its  work  must  be  done.  There  were  hundreds  of  cars  of  grain  in 
transit  at  the  time  of  the  fire,  and  there  were  thousands  more  which 
were  still  looking  to  Chicago  for  a  market.  Even  had  they  wished 
to  stop,  it  was  imperative  that  the  work  of  the  Exchange  should 
go  on.  The  Chicago  Relief  and  Aid  Society  was  designated  by 
Mayor  R.  B.  Mason  to  receive  and  distribute  all  contributions  for 
the  needy.  It  not  only  contained  many  Board  members,  but  its 
chief  executives  were  called  from  the  ranks  of  the  Board  of  Trade. 
Murry  Nelson  was  chairman  of  the  committee  on  receiving,  stor- 
ing and  sorting  the  supplies  sent  by  the  generous  and  sympathetic 
people  of  the  whole  nation.  N.  K.  Fairbank  was  chairman  of  the 
committee  on  employment,  and  Wirt  Dexter  was  chairman  of  the 
committee  on  correspondence,  as  well  as  of  the  executive  com- 
mittee of  the  Relief  and  Aid  Society.  The  headquarters  for  the 
relief  committee  were  at  409  West  Washington  Street,  just  west 
of  Elizabeth.  On  October  13  the  "Tribune"  resumed  publication 
from  its  temporary  quarters  at  15  South  Canal  Street,  and  its  issue 
of  that  date  tells  of  the  proceedings  of  the  Board  of  Trade  at  the 
meeting  held  October  12.    The  "Tribune"  said: 

"There  is  still  but  little  doing  in  produce  circles,  but  our  com- 
mission merchants  and  grain  dealers  are  hard  at  work  in  preparing 
to  open  out  again  on  a  full  scale  just  as  soon  as  pecuniary  arrange- 
ments will  permit,  which  will  be  in  a  day  or  two,  probably  the  first 
of  next  week.  A  goodly  number  of  them  are  busy  helping  to  dis- 
tribute food  and  clothing  to  the  destitute,  the  remainder  are  fitting 
up  offices  in  the  vicinity  of  the  temporary  Board  of  Trade  rooms, 
mostly  on  Canal  and  West  Washington  streets,  pending  which 
their  headquarters  are  51-53  Canal  street,  where  the  Board  will  do 
business  until  the  Chamber  of  Commerce  can  be  rebuilt.  The 
feeling  today  was  50  per  cent  more  hopeful  than  yesterday.     Re- 


[1871]  OF  THE  CITY  OF  CHICAGO  429 

ports  were  received  and  read  by  the  Secretary  in  rapid  succession 
announcing  the  cheering  prospect  that  the  banks  and  insurance 
companies  will  speedily  redeem  their  obligations  to  the  public. 
Produce  is  coming  in  rather  slowly  as  the  railroads  cannot  spare 
many  cars,  nor  could  the  elevators  handle  much  grain  in  the  present 
unsettled  state  of  affairs. 

"The  grain  inspectors  are  at  work  and  will  report  tomorrow. 
Some  grain  is  moving  out.  About  four  cargoes  were  reported 
today  from  the  Northwestern  and  Armour,  Dole  &  Co.  elevators. 
Rates:  11  cents  for  wheat,  10  cents  for  corn  and  7^^  cents  for  oats 
by  sail  to  Buffalo.  Wheat  by  steam  is  15  cents.  The  Chamber 
of  Commerce  Association  has  received  $100,000  to  proceed  with 
the  reconstruction  of  their  building.  It  is  thought  b}'  some  that  an 
effort  will  be  made  to  induce  the  Board  of  Trade  to  seek  other 
quarters  than  that.  In  such  a  case  the  Chamber  of  Commerce  would 
probably  organize  a  new  Board  under  their  charter.  The  provision 
dealers  held  a  meeting  at  noon  today,  but  accomplished  nothing. 
It  was  proposed  by  some  to  form  a  separate  organization  to  meet 
in  the  south  division,  the  project  being  supported  by  a  minority, 
including  our  heaviest  packers.  No  vote  was  taken  on  the  matter 
and  it  will  probably  be  considered  again  at  an  early  day.  The  safe 
of  the  Chamber  of  Commerce  was  opened  today  and  the  contents 
rescued  in  first-class  condition." 

On  the  14th  it  was  stated  that  the  Board  had  tried  to  rent  a 
store  on  West  Randolph  street,  but  the  owner  asked  a  most  exorbi- 
tant rent.  The  next  day  100  soldiers  were  detailed  to  take  posses- 
sion of  the  store  for  relief  purposes,  and  they  did  so  at  the  point  of 
the  bayonet.  The  "Tribune"  adds:  "Serves  the  old  Shylock  right." 
On  the  13th  the  produce  dealers  attempted  to  resume  business  to 
some  extent,  but  there  was  not  much  done  except  in  small  lots  for 
home  use.  There  was  a  larger  attendance  and  the  talk  was  less 
of  the  fire  and  more  of  the  new  location,  there  being  much  argument 
as  to  the  proposal  to  move  to  Burlington  Hall  in  the  south  division. 
The  directors,  however,  seem  to  have  had  no  doubts  as  to  the 
proper  course.  They  leased  the  quarters  in  which  they  were  located 
for  $1,500  per  year  and  entered  into  an  agreement  with  the  Chamber 
of  Commerce  to  move  back  to  the  former  location  as  soon  as  the 
building  was  reconstructed,  which  was  promised  within  twelve 
months.  Much  rivalry  sprang  up  as  to  the  location,  and  the  "Trib- 
une" said  it  was  a  reminder  of  the  struggle  thirty-eight  years 
before,  "between  the  west  side  (Wolf's  Point)  and  the  south  side 
of  the  river."  The  resolution  of  the  directors,  which  was  framed 
in  the  true  spirit  of  Chicago  helpfulness  and  integrity,  was  as 
follows :  "That  the  Board  of  Directors  of  the  Board  of  Trade 
hereby  notify  the  Chamber  of  Commerce  corporation  that  this 
Board  will  comply  with  the  provisions  of  the  lease  we  hold  from 
them,  and  that,  in  conformity  with  the  lease,  the  Board  hereby 
requires  the  Chamber  of  Commerce  to  reconstruct  at  once  their 
building  in  as  good  shape  and  condition  as  it  was  originally,  and 


430  HISTORY  OF  THE  BOARD  OF  TRADE  [1871J 

it  is  the  wish  of  the  Board  to  occupy  the  building  at  the  earliest 
possible  day."  Another  great  problem  confronting  the  Board  was 
the  disposition  of  the  grain  damaged  by  the  fire.  To  meet  this 
emergency,  at  the  request  of  representatives  of  insurance  com- 
panies and  others  the  directors  named  a  committee  to  salvage  the 
grain  and  sell  it  to  the  best  advantage  of  all  concerned.  The  com- 
mittee was  a  general  one,  but  was  divided  into  sections  to  deal 
with  the  grain  in  the  different  burned  elevators.  The  committee 
was  empowered  to  employ  labor  and  to  secure  storage  quarters 
and  to  eiifect  a  sale.  The  committee  was  as  follows:  North  side 
elevators,  J.  B.  Lyon,  S.  H.  McCrea,  C.  W.  Wheeler ;  central  ele- 
vator "A,"  E.  Buckingham,  M.  S.  Bacon,  Josiah  Stiles;  national 
elevator,  C.  J.  Gilbert,  E.  B.  Stevens  and  D.  W.  Irwin.  The  amount 
of  grain  damaged  by  the  fire  was  estimated  at  1,600,(XX)@  1,700,000 
bushels.    Five  elevators  were  burned  and  eleven  were  standing. 

At  the  meeting  of  the  Exchange  on  Saturday  it  was  reported 
that  little  was  done,  as  the  Secretary  was  surrounded  by  applicants 
for  relief  and  by  committees  planning  relief  work.  Another  prob- 
lem which  had  to  be  met  was  the  settlement  of  contracts  outstand- 
ing at  the  time  of  the  fire.  For  this  purpose,  a  meeting  was  held  at 
which  President  Preston  presided.  On  motion  of  D.  H.  Lincoln, 
the  record  of  the  directors'  proceedings  was  read  to  the  efifect  that 
all  such  scores  be  settled  upon  the  basis  of  the  price  current  at  the 
close  of  'Change  on  Saturday,  and  that  a  committee  of  nine  be 
appointed  to  establish  a  price  basis  for  formal  settlements.  There 
were  several  attempts  to  amend  this  in  various  ways,  but  the  honor 
of  the  Board  prevailed  and  the  recommendation  of  the  directors 
was  adopted.  The  committee  which  was  to  act  as  a  clearing  house 
committee  was  as  follows :  Ira  Y.  Munn,  /George  M.  How,  A.  B. 
Hitchcock,  A.  M.  Wright,  George  Walker,  Wiley  M.  Egan,  J.  H. 
Dole,  J.  L.  Hancock  and  S.  H.  McCrea.  The  appointment  of  this 
committee  gave  universal  satisfaction,  though  its  work  was  diffi- 
cult, for  the  destruction  of  the  records  obliterated  all  traces  of  many 
transactions,  some  of  which  could  not  even  be  remembered. 

October  14,  those  members  who  were  dissatisfied  with  the 
new  location  and  who  felt  the  time  was  propitious  to  move  the 
business  center  towards  the  south,  met  at  Standard  Hall,  Michigan 
avenue  and  Thirteenth  street,  to  consider  the  action  by  which 
rooms  had  been  taken  in  the  west  division  for  the  use  of  the  Board. 
P.  L.  Underwood  presided,  C.  Counselman  was  secretary,  and 
W.  B.  Ogden  chief  speaker.  R.  M.  Hough  urged  that  all  the  busi- 
ness of  the  city  was  south  of  Twelfth  street  and  that  the  Board 
of  Trade  should  be  located  near  the  business  center.  At  a  second 
meeting  held  on  Monday,  the  16th,  M.  G.  Linn  presided  and  a  reso- 
lution offered  by  N.  K.  Fairbank  was  adopted  and  signed  by  all 
present.  In  effect  this  was  that  while  there  was  no  secession,  the 
members   found   it  inconvenient  to  attend  meetings  at   the   new 


[1871]  OF  THE  CITY  OF  CHICAGO  431 

location  and  had  rented  Standard  Hall  for  one  year  and  proposed 
to  do  their  trading  there. 

This  action  presented  a  delicate  situation  which  might  well 
have  wrecked  the  Board.  A  wise  spirit  of  compromise  finally  pre- 
vailed and  at  a  meeting  held  on  the  19th,  the  Board  of  Trade 
accepted  an  offer  made  by  Judge  Farrell,  to  erect  a  wigwam  for 
temporary  use  on  the  southwest  corner  of  Washington  and  Market 
streets  and  to  give  the  Board  of  Trade  the  free  use  of  a  room  90x90 
feet  therein.  The  building  was  not  ready  quite  as  soon  as  expected, 
but  on  December  11  the  Board  was  able  to  move  to  its  new  quarters. 
The  wigwam  was  all  that  could  have  been  expected  of  a  building 
so  hastily  constructed  and  under  such  circumstances.  That  the 
inconveniences  must  have  been  keenly  felt  in  comparison  with  the 
accommodations  of  the  old  Chamber  of  Commerce  building  is  un- 
doubtedly true.  There  were  no  "pits";  all  trading  had  to  be  done 
in  common;  heating  arrangements  were  poor  and,  at  first,  there 
were  no  suitable  means  of  keeping  visitors  from  the  floor,  and 
speculators  and  spectators  mingled  indiscriminately.  There  were 
some  murmurs,  of  course,  but  for  the  most  part  the  members  bore 
the  inconveniences  sm.ilingly  and  as  simply  incidental  hardships 
dwarfed  by  the  great  calamity  which  had  befallen  them. 

The  committee  to  care  for  and  sell  the  damaged  grain  did  its 
work  well.  That  in  poorest  condition  was  sold  for  chicken  feed, 
some  of  the  best  sold  as  high  as  60  cents  per  bushel,  and  the  total 
amount  received,  about  $63,000,  represented  about  4  cents  per  bushel 
for  the  contents  of  the  burned  elevators.  Part  was  sold  at  private 
sale  and  the  remainder  at  auction  and  there  is  no  record  that  any 
of  the  owners  complained  of  the  acts  of  the  committee.  Damaged 
grain  at  the  Galena  elevator  brought  $26,750,  at  the  Wheeler,  $6,150, 
and  at  the  Munger  and  Armour,  $3,055.  The  Chicago  fire  was  the 
greatest  blow  the  insurance  business  of  the  world  had  ever  known. 
Many  companies  were  driven  into  bankruptcy  and  in  spite  of  the 
first  promises  of  early  payment,  settlements  were  slow  and  many 
were  never  made  in  full.  Very  naturally,  with  the  lesson  of  the 
fire  fresh  in  mind,  the  insurance  companies  were  loath  to  do  busi- 
ness except  at  a  very  high  rate,  especially  at  Chicago.  |On  grain 
in  store  the  two-day  rate  was  equivalent  to  24  per  cent  per  annum 
and  the  ten-day  rate  was  equal  to  18  per  cent  per  annum.  This 
made  the  cost  of  insurance  almost  prohibitive  and  there  was  much 
discussion  relative  to  the  formation  of  a  mutual  company  among 
the  dealers  and  producers,  and  a  committee  consisting  of  E.  B. 
Stevens,  J.  B.  Lyon  and  B.  F.  Murphy  was  appointed  to  urge  upon 
the  insurance  companies  a  more  liberal  policy. 

There  were  still  other  problems  growing  out  of  the  fire.  Ac- 
cording to  law  grain  could  not  be  delivered  from  store  without  the 
presentation  and  cancellation  of  the  warehouse  certificate.  Nearly 
all  the  outstanding  receipts  were  destroyed,  and  the  members  were 


432  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

confronted  by  the  fact  that  they  could  not  legally  get  their  grain 
out  of  store.  A  special  meeting  was  held  October  16,  and  a  resolu- 
tion asking  the  legislature  to  pass  immediately  a  bill  suspending 
this  section  of  the  law,  on  receipts  dated  before  October  8,  1871. 
This  resolution  was  wired  to  Springfield  and  was  soon  acted  upon 
by  the  Legislature  as  desired.  The  settlement  committee  also 
reported  promptly  and  by  October  17  it  was  reported  that  two- 
thirds  of  the  options  had  been  settled  on  the  basis  suggested.  Later 
the  committee  suggested  that  all  money  deposited  on  privileges  be 
returned.  Immediately  after  the  fire  nearly  all  the  funds  of  the 
community  were  inaccessible.  This  demoralized  the  market  in 
many  ways.  The  "Tribune"  of  October  21  gives  a  vivid  picture 
of  conditions:  "The  depression  is  well  marked  by  the  fact  that 
wheat  sold  for  5  cents  per  bushel  lower  here  than  at  Milwaukee.  The 
weakness  was  almost  equally  great  in  the  other  grain  markets. 
This  was  due  to  the  universal  desire  to  realize,  produced  by  the 
imperative  necessity  to  obtain  money.  The  great  bulk  of  the 
property  held  by  the  more  needy  ones  was  sold  out  yesterday  and 
buyers  today  were  obliged  to  pay  better  prices.  Several  of  the 
most  prominent  operators  had  their  checks  thrown  out  by  the  banks 
two  or  three  days  ago,  but  most  of  them  have  made  it  all  right. 
Option  trading  has  not  recovered.  The  probabilities  are  the  Board 
of  Trade  will  give  the  death  blow  to  this  system  of  trading  by 
refusing  to  arbitrate  on  option  deals  in  cases  where  no  margin  had 
been  deposited." 

Another  serious  question  was  as  to  the  liability  of  railroad 
companies  for  grain  destroyed  before  it  had  been  delivered  to 
owners  or  agents.  Ordinarily  grain  coming  in  one  day  had  been 
immediately  placed  in  store  and  the  next  day  the  receipt  had  been 
delivered  upon  the  payment  of  freight.  A  considerable  amount  of 
grain  was  destroyed  before  receipts  had  been  accepted  or  tendered, 
and  the  owners  claimed  the  railroads  were  responsible  in  spite  of 
the  shipper's  receipts  which  absolved  the  railroads  from  all  such 
liability.  The  owners  claimed  that  they  were  forced  to  sign  such 
receipts  in  order  to  get  grain  shipped  and  that  they  would  not 
stand  in  law.  A  meeting  was  held  of  the  owners  and  a  committee 
appointed  to  care  for  their  interests.  Another  result  of  the  fire  was 
the  suspension  of  the  "Commercial  Express,"  the  trade  paper  pub- 
lished by  Joel  Wells.  On  November  17  the  provision  dealers  and 
packers,  who  were  not  satisfied  with  the  new  location,  met  and 
decided  to  establish  an  evening  exchange  at  Michigan  avenue  and 
Twenty-second  street.  They  were  to  meet  regularly,  from  7:30 
to  9  p.  m.,  and  the  officers  were  B.  P.  Hutchinson,  President;  W.  E. 
Richardson  and  C.  M.  Culbertson,  Vice  Presidents;  J.  P.  Marot, 
Secretary,  and  A.  S.  Burt,  Treasurer.  The  members  were  assessed 
five  dollars  each  for  expenses.  And  in  the  midst  of  all  this  turmoil 
and  loss  and  hardship  the   Board  adjourned  to  observe  Thanks- 


i»' if^aJnt^^^^—n^SLmi; 


;'i)!':'|JMii|tiff!|| 


if;.iy;ii:4iir 


Early     Board     of     Trade     Building. 


Chamber  of  Commerce   Where  the    Board    of   Trade    Met.      Destroyed    in    the 

Fire  of  1871. 


[1871]  OF  THE  CITY  OF  CHICAGO  433 

giving  Day,  President  Preston  urging  that  "they  had  much  to  be 
thankful  for." 

The  National  Board  of  Trade  met  in  St.  Louis  in  December. 
A.  M.  Wright  of  Chicago  was  one  of  the  vice-presidents  elected 
and  J.  W.  Preston  was  a  member  of  the  credentials  committee. 
Resolutions  were  adopted  favoring  the  building  of  levees  along  the 
Mississippi  and  for  better  trade  relations  with  Canada.  Congress 
was  memorialized  to  pass  a  law  punishing  the  sending  of  fraudulent 
telegrams,  and  a  resolution  of  sympathy  with  Chicago  and  the 
Board  of  Trade  on  account  of  the  great  fire  was  passed. 

Upon  moving  to  its  new  quarters  a  new  business  schedule  was 
also  put  into  effect  and  the  hours  of  the  exchange  were  made  from 
9  a.  m.  to  5  p.  m.  and  it  was  stipulated  that  there  was  to  be  no 
smoking  between  the  hours  of  11  a.  m.  and  1:30  p.  m.,  which  are 
the  hours  of  "high"  exchange.  Among  the  first  distinguished 
guests  of  the  Board  in  its  new  home  was  Hon.  Frederick  Fraley, 
President  of  the  National  Board  of  Trade,  who  stopped  in  Chicago 
on  his  return  from  the  convention  at  St.  Louis.  He  expressed  him- 
self in  highest  terms  of  appreciation  of  the  great  work  the  Board 
had  done  in  re-establishing  itself  so  quickly  and  carrying  on  its 
business  so  manfully.  While  the  majority  of  the  deals  pending  at 
the  time  of  the  fire  were  settled  on  the  basis  suggested  by  the  spe- 
cial committee,  there  were  some  who  refused  to  accept  its  decision. 
The  directors  were  called  upon  to  suspend  those  members  who 
refused  to  abide  by  the  terms  laid  down  by  the  comrriittee.  They 
found  that  they  had  no  power  to  do  this,  but  passed  a  resolution 
condemning  "the  Shylocks  who  demanded  their  pound  of  flesh 
when  all  the  world  was  showing  its  generosity  in  Chicago's  afflic- 
tion." Also,  to  help  out  the  storage  facilities  so  badly  crippled  by 
the  fire,  the  directors  resolved  to  accept  as  "regular"  receipts  for 
grain  stored  in  cribs  adjacent  to  elevators,  providing  no  higher 
rates  were  charged,  and  that  other  structures  would  be  made  "regu- 
lar" after  passing  inspection  by  the  Board.  This  action  was  ap- 
proved by  the  full  Board  December  29  and  was  the  last  official  act 
of  the  year  of  the  great  fire. 

The  report  of  Secretary  Randolph  covers  the  work  of  the  year 
1871  concisely  and  well  in  every  branch  and  also  tells  of  the  havoc 
of  the  flames.  After  giving  what  might  seem  an  unnecessary 
apology  for  the  lateness  of  the  report,  the  Secretary  said : 

At  the  time  of  the  great  calamity  which  befell  Chicago  on  the 
8th  and  9th  of  October  last,  more  than  one-third  of  the  labor  in 
preparing  this  report  had  been  performed,  and  the  partially  com- 
pleted sheets  of  "copy"  were  in  condition  to  be  finally  completed 
without  unnecessary  effort  or  delay.  All  were  destroyed,  and  with 
them  nearly  all  the  data  from  which  they  were  compiled.  The  sta- 
tistical books  of  the  Board,  without  an  exception,  were  burned,  and 
all  the  material  used  in  preparing  the  report  that  remained  were 


434  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

a  few  of  the  revised  monthly  reports  of  some  of  the  railroads,  and 
a  portion  of  the  condensed  weekly  statements  of  receipts  and  ship- 
ments. By  the  kindness  of  the  Union  Merchants  Exchange,  of  St. 
Louis,  the  Board  was  supplied  with  the  files  of  the  Chicago  "Daily 
Tribune"  from  January  1  to  October  7  (as  also  of  several  previous 
years),  and  Messrs.  Howard,  White  &  Crowell  generously  ten- 
dered the  use  of  their  files  of  the  "Daily  Commercial  Bulletin." 
From  these,  in  connection  with  data  furnished  by  the  railroad  offi- 
cials, and  such  scraps  of  reliable  information  as  could  be  other- 
wise obtained,  the  report  as  now  presented  has  been  compiled. 
The  statistics  furnished  by  the  railway  officials — many  of  them 
obtained  at  great  labor  and  expense,  owing  to  the  entire  destruc- 
tion of  books  and  papers — has  been  most  valuable,  and  is  very 
gratefully  acknowledged.  It  is  to  be  regretted  that,  in  consequence 
of  the  total  destruction  of  all  records  in  the  Custom  House,  as  full 
returns  of  our  lake  commerce  cannot  be  obtained  as  in  former  years. 
The  statements  of  railway  traffic  are  also  in  some  cases  incomplete, 
but  it  is  believed  that  in  the  leading  articles  of  the  city's  commerce 
usually  reviewed  in  the  reports  of  this  Board,  the  figures  herewith 
presented  are  substantially  correct.  If  erroneous  in  either  direc- 
tion, they  are  under  rather  than  over  that  which  would  be  strictly 
correct. 

The  year,  although  darkened  by  a  most  unparalleled  catas- 
trophe, must,  in  a  general  business  view,  be  regarded  as  a  most 
satisfactory  one,  perhaps  exceeding  in  substantial  advancement 
any  of  its  predecessors.  In  all  branches  of  the  city's  trade  the 
first  nine  months  of  1871  witnessed  great  prosperity.  There  were 
no  features  of  marked  excitement  or  speculation  in  any  direction, 
but  a  steady  and  vigorous  growth  in  solid  commercial  enterprises, 
shared  in  and  supported  by  the  great  interior,  whose  interests  and 
ours  are  so  closely  allied.  And  although  in  one  short  day  the  stores, 
warehouses,  manufactories,  goods,  and  the  homes,  with  their  sacred 
treasures,  of  a  large  portion  of  our  people  were  swept  away  and 
destroyed — thousands  finding  themselves  greatly  reduced,  or  per- 
chance penniless — still,  the  business  upon  which  the  prosperity  of 
all  depended  seemed  interrupted  but  for  a  moment,  and  resumed  its 
accustomed  volume  as  soon  as  the  smoke  of  the  devouring  element 
was  cleared  away  and  facilities  for  its  care  could  to  any  fair  extent 
by  reorganized  or  improvised.  Long  years  of  toil  may  be  required 
to  make  good  to  individuals  the  fearful  losses  of  those  lurid  hours, 
still  the  great  wheels  of  commerce  and  trade  will  revolve  as  before, 
and  it  is  safe  to  say  that  today  the  future  of  our  city  promises  as 
grandly  as  it  has  ever  done  in  the  past. 

In  cereals,  the  business  of  the  year  just  closed  has  vastly  ex- 
ceeded any  that  have  gone  before ;  our  aggregate  receipts  of  grain 
and  flour  (reduced  to  wheat)  being  83,518,202  bushels,  the  largest 
in  any  previous  year  being  69,680,233  bushels  in  1868.  So  also  in 
live  stock  the  increase  has  been  very  marked,  and  as  prices  have 
been  well  maintained,  it  may  be  assumed  that  the  farmer  finds 
himself  in  easy  circumstances  and  in  the  enjoyment  of  a  rich  return 
for  his  toil.  In  the  various  branches  of  manufacturing  industry  in 
the  city,  satisfactory  results  have  been  achieved,  and  in  the  reorgan- 


[1871]  OF  THE  CITY  OF  CHICAGO  435 

ization  and  rebuilding  of  the  city  it  is  expected  that  manufacturing 
will  be  more  fully  developed  and  better  provided  with  facilities  for 
its  successful  prosecution.  It  is  of  great  importance  to  our  city 
that  manufacturing  such  articles  as  can  be  produced  profitably  at 
home  should  meet  with  liberal  encouragement,  and  certainly  a 
broader  field  for  enterprise  of  this  sort  is  open  among  us  than  is 
occupied. 

Previous  to  October,  building  enterprises  had  been  prosecuted 
steadily,  but  not  so  many  elegant  business  houses  had  been  erected 
as  during  some  previous  years ;  nearly  all  of  the  more  costly  erec- 
tions were  located  in  what  is  now  the  "burnt  district."  Some 
private  residences,  equal  in  point  of  cost  or  elegance  to  almost 
any  in  the  country,  were  in  course  of  erection,  and  are  unharmed. 
The  improvement  of  the  recently  established  public  parks  has  been 
carried  forward  with  much  vigor,  and  will  still  be  continued,  though 
on  a  reduced  scale. 

During  the  early  summer  a  very  carefully  canvassed  account- 
ing of  population  was  had,  resulting  in  determining  the  city's 
population  at  that  time  to  be  334,270.  By  October  1  it  was  scarcely 
less  than  350,000.  Immediately  after  the  fire  there  was  a  large 
exodus,  but  most  of  those  leaving  the  city  have  already  returned, 
or  their  places  have  been  filled  by  newcomers,  so  that  at  the  close 
of  the  year  moderate  estimates  place  the  population  at  about  325,000. 

Our  banking  facilities  were  somewhat  increased  during  the 
early  part  of  the  year  by  the  organization  of  two  new  national 
banks,  and  immediately  after  the  fire  the  Bank  of  Montreal — the 
largest  banking  institution  in  America — consummated  an  arrange- 
ment previously  contemplated  by  establishing  an  agency  in  this 
city.  This,  it  is  believed,  will  be  of  gfreat  assistance  to  our  mer- 
chants, as  well  as  highly  remunerative  to  the  parent  institution. 
That  Chicago  can  profitably  employ  additional  well-managed  bank- 
ing capital  would  hardly  seem  to  admit  of  question,  in  view  of  the 
exceedingly  satisfactory  results  that  have  attended  all  our  national 
bank  enterprises.  It  is  hoped  that  at  no  distant  day  the  value 
hitherto,  and  at  present,  set  upon  the  use  of  money  in  this  city  may 
be  materially  reduced.  The  general  character  of  bank  paper,  being 
largely  secured  by  undoubted  collaterals,  would  seem  to  justify  a 
lower  rate  of  interest  than  ten  per  cent,  and  if  an  abatement  could 
be  secured  in  this  regard,  business  would  undoubtedly,  in  many 
branches  at  least,  be  greatly  stimulated. 

While  for  details  of  figures  representing  the  business  in  some 
of  the  leading  items,  reference  is  made  to  the  tables  and  statements 
herewith,  brief  reference  to  some  may  not  be  out  of  place  in  this 
connection.  As  in  former  years,  the  trade  in  the  products  of  the 
farm  has  formed  a  very  large  and  important  element  in  the  general 
business;  in  fact,  it  lies  at  the  very  basis  of  all  other  industries  in 
the  city. 

Flour 

The  business  of  milling  in  the  city  has  not  been  as  large  as 
formerly,  and  for  the  early  months  was  only  very  moderately  re- 
munerative,  becoming   much   more   so   during  the   early   autumn. 


486  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

however,  and  at  the  time  of  the  fire  it  was  being  prosecuted  to  a 
much  greater  extent,  and  more  profitably,  than  for  some  time  pre- 
viously. Six  large  mills  were  destroyed ;  these,  in  1870,  manufac- 
tured more  than  half  of  the  flour  made  that  year,  leaving  not  half 
enough  to  supply  the  current  city  consumption.  The  total  manu- 
facture in  the  city  for  1871  was  327,739  barrels,  and  the  receipts 
were  1,412,177  barrels,  being  a  falling  ofif  as  compared  with  1870 
of  116,237  barrels  in  the  former  and  353,860  barrels  in  the  latter. 
The  hope  entertained  a  year  since  that  diiiferent  and  better  arrange- 
ments would  be  adopted  in  regard  to  the  delivery  of  wheat  to  our 
city  mills  has  not  to  any  extent  been  realized,  and  the  system  of 
requiring  our  millers  to  pay  an  onerous  and  largely  unnecessary 
charge  for  storage  and  expenses  is  still  persistently  adhered  to. 
Whether  or  not  this  system  will  at  no  distant  day  entirely  destroy 
the  business  of  manufacturing  flour  in  this  city  is  a  question  of 
grave  concern  and  challenges  our  attention. 

Wheat 

In  wheat,  the  business  has  been  large,  though  less  in  the 
aggregate  than  that  of  1870.  The  deliveries  after  January  of  the 
crop  of  1870  were  less  than  many  had  anticipated.  The  new  crop 
was  harvested  somewhat  earlier  than  the  average  of  years,  and 
was  secured  in  remarkably  fine  condition,  and  proved  of  very  supe- 
rior quality.  The  yield  per  acre,  however,  does  not  appear  to  have 
been  as  large  as  in  some  previous  years,  nor  was  it  as  large  as  was 
anticipated  previously  to  harvest.  The  receipts  for  the  year  amount 
to  14,439,656  bushels,  against  17,394,409  bushels  in  1870.  The 
movement  in  wheat  at  the  time  of  the  fire  in  October  was  at  its 
height,  the  receipts  of  the  week  ending  October  7  being  the  largest 
of  any  week  in  the  history  of  the  city.  The  sudden  derangement 
in  business  of  course  tended  for  a  time  to  divert  a  very  large  amount 
to  other  points,  and  as  the  season  was  drawing  to  a  close,  and  our 
people  were  for  a  time  illy  prepared  to  properly  care  for  an  active 
business,  a  considerable  falling  off  in  receipts  resulted,  and  when 
again  trade  resumed  its  usual  course  it  was  found  that  the  bulk  of 
wheat  intended  for  market  during  the  autumn  had  been  disposed 
of.  Prices  have  been  well  maintained  throughout  the  year,  opening 
at  about  110  cents  for  No.  2  spring,  and  closing  at  120  cents;  the 
highest  point  touched  was  132  cents  in  August,  the  lowest  993^ 
cents,  earlier  in  the  same  month.  The  supply  yet  unmarketed  is 
not  estimated  as  large,  and  it  is  not  improbable  that  all  will  be 
wanted  before  another  harvest. 

Com 

The  receipts  of  corn  have  exceeded  by  far  those  of  any  pre- 
vious year.  The  crop  of  1870  was  of  superior  quality  and  large  in 
amount,  and  as  the  supply  of  old  corn  was  well  exhausted,  the  crop 
of  1869  being  much  below  the  average,  the  new  found  ready  pur- 
chasers as  soon  as  it  could  be  placed  in  market.  As  the  season 
advanced  the  supply  seemed  almost  limitless,  and  as  the  good 
quality  and  heavy  yield  of  the  growing  crop  became  well  assured, 
farmers    seemed    inclined   to    close   out    their    stocks    at   the   then 


[1871]  OF  THE  CITY  OF  CHICAGO  437 

current  prices.  The  new  crop  of  1871  began  to  appear  in  market 
in  September,  which  was  probably  earlier  than  on  any  previous 
year  in  this  State,  since  which  it  has  arrived  very  freely — in  fact, 
the  supply  has  been  limited  only  by  the  means  obtainable  to  trans- 
port it;  so  that,  notwithstanding  a  movement  eastward  to  the  full 
capacity  of  our  lake  marine,  the  winter  closed  upon  us  with  full 
850,000  bushels  in  store  at  this  point,  which  had  increased  by  the 
close  of  December  to  3,113,000  bushels.  Everything  now  points 
to  a  complete  blockade  of  storage  facilities  at  any  early  day,  result- 
ing from  necessity  in  the  cessation  of  the  present  free  movement. 
In  fact,  it  seems  probable  that  by  loading  all  the  carrying  capacity 
now  in  our  harbor  we  shall  still  be  blockaded,  with  little  hope  of 
relief  until  some  time  after  the  resumption  of  lake  navigation  in 
the  spring.  The  receipts  have  been  41,853,138  bushels  in  1871,  in 
1870  they  were  20,189,775  bushels,  and  in  1866  they  were  33,543,061 
bushels,  which  were  the  largest  of  any  year  previous  to  1871.  Prices 
have  ruled  remarkably  steady  during  the  year,  though  slowly  de- 
clining under  the  continued  heavy  receipts,  and  as  the  markets  of 
the  world  became  supplied.  In  times  of  great  surplus  in  the  United 
States  of  any  given  item  of  production,  our  markets  must  be  con- 
trolled by  prices  at  which  it  can  be  taken  by  exporters.  While  in 
1869  and  the  early  part  of  1870  exports  of  corn  were  insignificant 
in  amount,  they  have  risen  during  the  past  year  to  respectable  pro- 
portions, and  should  the  European  demand  continue  at  fair  prices, 
our  farmers  may  realize  good  returns  for  their  vast  production  of 
corn  during  the  past  year.  Without  a  remunerative  export  demand 
there  would  seem  no  hope  but  that  prices  must  settle  to  a  point 
that  would  effectually  cut  off  remote  shipment  and  leave  a  large 
amount  on  the  hands  of  distant  producers  to  be  disposed  of  by 
other  means  than  its  sale  in  the  grain.  At  the  close  of  the  year. 
No.  2  corn  is  but  a  shade  above  40  cents,  the  highest  point  touched 
during  the  year  was  56y2  cents  in  March. 

Oats 

The  trade  in  oats  has  also  been  large,  receipts  amounting  to 
14,789,414  bushels;  the  previous  year  they  were  10,472,078.  The 
trade  has  been  without  excitement,  and  not  as  largely  speculative 
as  in  some  former  years.  Prices  closed  at  about  31^4  cents  for 
No.  2. 

Rye 

The  movement  in  rye  has  been  larger  than  ever  before,  receipts 
amounting  to  2,011,788  bushels.  The  demand  has  been  of  a  legiti- 
mate character,  considerable  amounts  being  shipped  by  carload  in 
almost  every  direction.  The  market  closed  at  62^/$  to  63  cents 
per  bushel. 

Barley 

This  uncertain  and  unreliable  grain  has  also  been  received  in 
larger  measure  than  in  any  previous  year,  the  total  being  4,069,410 
bushels,  against  3,335,653  bushels,  the  large  receipts  of  1870.  The 
price  of  No.  2  opened  in  January  at  about  75  cents ;  by  April  it  had 
advanced  to  $1.05.     Thence  till  the  new  crop  began  to  arrive  the 


438  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

tendency  was  down.  New  opened  at  about  65  cents,  declined  at 
51  cents  in  November,  and  closed  at  60  cents  to  61  cents  per  bushel. 
The  quality  of  the  crop  of  1871  was  fair;  its  condition  as  to  color 
and  other  important  qualities  was  good,  indeed,  much  above  that 
of  most  of  the  late  years. 

Live  Stock 

Chicago  still  maintains  her  supremacy  in  this  branch  of  busi- 
ness. In  both  cattle  and  hogs  there  has  been  a  gain  over  any  former 
year.  In  hogs  the  increase  has  been  very  marked,  being  over  40 
per  cent  more  than  in  1870.  The  receipts  have  been,  of  cattle, 
543,050;  of  hogs,  2,380,083;  and  of  sheep,  315,053;  the  total  value 
of  stock  received  aggregating  full  $60,000,000.  Cattle  have  ruled 
fairly  active  and  steady  during  the  year.  At  times  the  market  has 
been  overstocked  for  a  few  days,  which  has  been  promptly  remedied 
by  withholding  cattle  until  the  surplus  has  been  disposed  of.  Hogs 
opened  in  January  at  $5.80  to  $6.25,  gross  steadily  declining,  with 
slight  fluctuations,  until  the  close  of  the  year,  when  they  were 
quoted  at  $4  to  $4.60. 

Provisions 

The  trade  in  meats  has  been  of  vast  proportion,  being  active 
during  nearly  the  whole  year.  Speculation  has  been  largely  con- 
fined to  mess  pork  and  lard,  while  cut  meats  have  been  in  good 
demand  for  consumption.  Chicago  cured  meats  have  a  high  reputa- 
tion, and  this  city  has  assumed  a  position  largely  establishing 
prices  for  the  whole  country.  Our  pork  packing  greatly  exceeds 
that  of  any  other  point,  and  seems  still  on  the  increase.  Fortu- 
nately, the  great  fire  did  not  sensibly  interfere  with  this  branch  of 
business,  the  principal  packing  houses  being  located  at  points  remote 
from  the  "burned  district."  Mess  pork,  in  the  early  part  of  Jan- 
uary, sold  at  $18.37  to  $19,  but  before  the  close  of  the  month  had 
advanced  to  $23  for  well  known  brands,  but  from  that  point  declined 
until  in  August  sales  were  made  as  low  as  $12,  since  which  a  firmer 
feeling  has  prevailed,  though  no  great  advance  has  been  realized, 
at  the  close  it  may  be  quoted  at  $13  to  $13.25. 

Lvunber 

No  reduction  in  this  branch  of  business  has  been  observable ; 
in  fact,  the  receipts  of  lumber  proper  have  been  larger  by  over 
twenty  million  feet  than  in  1870.  Receipts  of  shingles  have  been 
a  trifle  less.  Receipts  of  the  former  figure  up  1,039,328,375  feet; 
of  the  latter,  647,595,000.  Prices,  both  by  cargo  and  in  the  yards, 
ruled  very  steady  until  about  August,  when  some  advance  was 
realized.  After  the  fire,  owing  to  the  pressing  demand,  an  advance 
on  some  grades  was  established  of  $3  to  $5  per  thousand  feet.  At 
about  the  same  time  that  a  large  part  of  our  city  was  destroyed 
by  fire  very  great  destruction  was  suffered  by  the  same  element  in 
the  country  districts  from  whence  a  large  portion  of  our  lumber 
supplies  are  received ;  many  large  and  important  mills  were  de- 
stroyed, and  thousands  of  acres  of  timber  lands  were  burned  over, 
greatly  reducing  the  value  of  such,  though  not  entirely  destroying 
all  the  lumber.    It  is  feared  the  loss  of  the  mills  referred  to  may  be 


[1871]  OF  THE  CITY  OF  CHICAGO  439 

seriously  felt  in  the  lumber  supply  of  the  coming  year  when  so 
much  will  be  needed  in  the  rebuilding  of  our  city.  It  is  understood 
that  arrangements  have  been  consummated  for  the  shipping  hither 
by  rail  of  large  quantities  of  lumber  during  the  winter,  and  already 
considerable  has  been  received.  In  the  October  fires  some  thirteen 
lumber  yards  were  burned  in  the  city,  involving  a  loss  of  about 
60,000,000  feet  of  lumber,  besides  other  items  of  stock.  At  the  close 
of  the  year  the  stock  in  the  city  is  about  234,500,000  feet  of  sawed 
and  hewn  pine  lumber  and  timber.  Less  than  a  year  since,  by  about 
the  amount  destroyed  by  fire. 

Transportation 

In  this  great  question,  so  intimately  connected  with  the  pros- 
perity of  the  great  interior  of  our  country,  no  especially  new  fea- 
tures have  been  developed  during  the  year.  The  large  grain,  live 
stock  and  provision  movement  has  caused  a  higher  range  of  prices 
in  freights  eastward  than  for  some  years  past ;  especially  is  this 
true  as  regards  freights  hence  by  lake.  Indeed,  the  past  has  been, 
for  the  vessel  interest,  more  profitable  than  several  of  the  recent 
years.  In  the  matter  of  establishing  any  State  control  over  our 
local  railway  lines,  for  the  correction  of  alleged  abuses,  it  does  not 
appear  that  any  substantial  point  has  been  gained,  and  the  ques- 
tion seems  as  far  from  solution  as  ever.  It  was  hoped  by  many 
that  the  establishment  of  a  State  commission,  especially  charged 
with  the  duty  of  investigating  this  question,  and  who  should  be 
clothed  with  power  to  prosecute  infractions  of  law,  would  result 
in  great  good  to  the  people  of  the  State,  either  by  a  prompt  appli- 
ance of  the  proper  remedy  for  abuses  charged  to  exist,  or  satisfying 
the  public  mind  that  its  suspicions  were  unfounded.  Such  a  com- 
mission has  been  in  existence  for  six  months,  and  have  made  their 
report  as  required  by  law.  It  does  not  appear  that  any  very  deter- 
mined attempt  has  been  made  to  either  correct  abuses,  if  such  exist 
(and  most  people  think  at  least  some  do  exist),  or  to  show  the  error 
of  public  opinion  in  this  regard.  Nothing  can  be  more  desirable 
than  that  the  feeling,  grown  to  great  intensity,  on  the  part  of  our 
people,  that  in  some  way,  or  many  ways,  their  rights  are  being 
trampled  upon  by  railway  corporations,  should  be  allayed  and,  if 
possible,  removed. 

Foreign  Trade 

The  books  and  memoranda  of  business  at  our  Custom  House 
being  destroyed,  no  figures  can  be  given  as  to  either  the  value  of 
goods  imported  and  exported,  or  the  amount  of  duties  collected. 
I  am  advised,  however,  by  the  Collector  of  Customs  that  direct 
importation  has  been  much  larger  the  past  year  than  previously. 
Very  large  amounts  of  tea  have  been  received  in  bond  via  San 
Francisco,  this  trade  increasing  rapidly  since  the  completion  of 
the  Pacific  Railway.  A  line  of  fine  steam  propellers  has  been  placed 
upon  the  route  between  this  city  and  Montreal,  connecting  at  that 
city  with  ocean  steamers.  Many  of  our  merchants  have  imported 
largely  by  this  route,  and  with  very  satisfactory  results  both  as 
to  time  and  cost.     A  short  time  before  our  great  fire,  one  of  the 


440  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

railway  transportation  lines  (Merchant's  Despatch)  doing  business 
between  this  city  and  New  York,  was  bonded  under  the  provisions 
of  the  act  of  Congress  encouraging  direct  importations  to  interior 
cities,  and  considerable  quantities  of  goods  were  imported  by  that 
means.  It  is  believed  business  will  be  greatly  benefited  by  this  mode 
of  importation,  as  the  goods  can  be  delivered  more  promptly,  in 
better  condition,  and  at  much  less  expense,  than  by  passing,  as 
hitherto,  through  the  process  of  opening  and  repacking  in  the  cus- 
toms depots  of  the  seaboard  cities.  Shipments  on  through  bills 
of  lading  hence  to  Europe  have  been  quite  extensive,  as  may  be 
observed  by  reference  to  the  table  exhibiting  the  same  more  in 
detail.  Besides  the  shipments  there  noted,  a  very  large  amount  of 
provisions  and  lard,  and  probably  other  property,  have  been  pur- 
chased in  this  market  for  European  account,  and  shipped,  but  re- 
ceipted for  only  to  New  York — ocean  freight  arrangements  being 
made  in  that  city. 

The  business  between  this  city  and  Canada  has  been  larger 
than  that  of  the  previous  year,  although,  as  in  other  items,  figures 
cannot  be  given  except  as  to  shipments  of  grain  and  flour;  these 
will  be  found  under  the  head  of  "Statement  Showing  the  Entire 
Movement  of  Flour  and  Grain." 

Chicago's  Calamity 

Of  course,  in  this  place,  no  extended  account  of  the  great 
calamity  which  visited  the  city  on  the  8th  and  9th  days  of  October 
last  will  be  expected.  Other  and  abler  pens  have  written  the  his- 
tory and  incidents  of  those  dark  days,  and  the  whole  civilized 
world  has  become  familiar  with  the  terrible  destruction  of  property 
that  laid  in  ashes  the  fairest  portion  of  our  city,  and  has  left  us  but 
the  shell  of  our  former  magnificence  and  grandeur.  Still,  a  brief 
record  of  this  very  memorable  event,  not  only  in  our  own  but  the 
world's  history,  may  be  deemed  as  proper.  The  fire,  which  com- 
menced its  ravages  on  the  evening  of  Sunday,  October  8,  at  about 
nine  o'clock,  originated  in  an  uninviting  portion  of  the  west  division 
of  the  city,  full  one  and  a  half  miles  from  the  court  house,  the 
nominal  center  of  business.  On  that  side  of  the  river  it  fed  on 
material  of  comparatively  little  value,  and  while  swift  in  its  march 
and  unrelenting  its  greed  for  the  destruction  of  everything  lying 
in  its  pathway,  it  was  not  until  it  had  leaped  the  river  and  com- 
menced its  ravages  in  the  more  substantial  buildings  and  heavy 
stocks  of  goods  on  the  South  Side  that  any  serious  alarm  was  cre- 
ated. Here,  where  the  ingenuity  of  man  had  erected  supposed 
protections  against  widespread  conflagrations,  the  flames  spread 
with  frightful  rapidity,  leaping  from  one  costly  structure  to  another, 
and  from  square  to  square,  on  the  wings  of  the  autumn  gale,  the 
volume  of  which,  at  the  time,  was  little  less  than  a  hurricane.  In 
an  incredibly  short  time  nearly  the  whole  of  the  business  portion 
of  the  South  Side,  embracing  about  three-quarters  of  a  square  mile 
in  area,  was  one  vast  sea  of  flames,  while  the  citizens,  many  of 
whom  had  become  panic-stricken,  could  think  of  little  else  than  the 
saving  of  their  lives,  helplessly  beholding  their  goods  and  valuables 
feed  the  insatiate  destroyer.    Not  an  occupied  or  completed  build- 


[1871]  OF  THE  CITY  OF  CHICAGO  441 

ing,  great  or  small,  in  the  track  of  the  wind  on  this  side  of  the  river 
escaped  total  destruction,  and,  in  fact,  the  flames  spread  several 
squares  directly  against  the  gale.  From  the  South  Side  the  mes- 
senger of  destruction  crossed  the  main  river  to  the  north  division, 
devastating  the  beautiful  homes,  and  their  surroundings,  of  the 
wealthy,  and  alike  laying  waste  the  humbler  dwellings  of  the  less 
favored  and  poorer  classes,  ceasing  only  when  material  to  furnish 
it  further  sustenance  had  been  exhausted.  At  an  early  hour,  or 
soon  after  the  fire  had  gained  a  footing  in  the  South  Division,  the 
flying  embers  had  ignited  the  building  in  which  was  located  the 
pumping  works  by  which  the  city  was  supplied  with  water  from 
Lake  Michigan,  and  soon  the  magnificent  engines  were  disabled 
and  the  last  hope  of  saving  anything  within  the  reach  of  the  de- 
stroyer had  vanished.  Although  the  fire  raged  but  about  twenty- 
two  hours,  yet,  within  that  time  more  than  2,100  acres  were  com- 
pletely burned  over,  and  in  all  that  vast  area  less  than  a  half  dozen 
buildings  of  any  sort  remained  standing.  At  least  17,000  buildings 
were  entirely  consumed,  and  nearly  or  quite  100,000  people  were 
rendered  houseless,  many  thousands  of  whom  escaped  with  nothing 
but  the  clothing  upon  them.  The  loss  of  life  (which  may  never 
be  even  approximately  known)  was  doubtless  several  hundred,  while 
the  money  value  of  buildings  and  goods  consumed  was  scarcely 
less  than  $175,000,000,  to  which  may  be  added,  probably  25  per 
cent  on  the  nominal  value  of  the  ground  burned  over;  this  latter 
loss,  however,  is  believed  to  be  only  temporary  and  nominal,  and 
will  be  recovered  at  no  distant  day.  Already  some  portions  of  the 
burned  district  are  saleable  at  much  higher  prices  than  the  same 
ground  would  have  commanded  before  the  fire.  To  say  that,  in  the 
presence  of  a  calamity  like  this,  the  citizens  of  Chicago  stood  ap- 
palled, and,  for  the  moment,  to  some  extent  disheartened,  is  not 
discreditable  either  to  their  good  judgment  or  their  acknowledged 
spirit  of  enterprise.  While  scarcely  as  yet  the  work  of  destruction 
had  been  stayed,  and  before  our  suflFering  citizens  could  gather 
together  their  scattered  families,  the  whole  country  was  aroused 
to  active  sympathy,  and  as  the  tale  of  loss  and  of  suffering  was 
repeated  by  the  click  of  the  telegraph  throughout  the  civilized  and 
Christian  world,  an  almost  universal  response  came  back  to  us, 
alike  touching  and  encouraging  to  our  hearts  and  creditable  to  our 
common  humanity.  Never  can  Chicago  forget,  nor  can  she  ever 
repay,  the  generous  expressions  and  kindly  acts  of  the  thousands 
who  in  the  day  of  her  distress  so  nobly,  so  grandly,  ministered  to 
her  pressing  necessities.  If  the  9th  day  of  October,  1871,  may 
be  counted  a  dark  day  in  the  history  of  our  city,  surely  many  days 
thereafter  were  bright  days  in  the  world's  history,  for  on  them 
was  displayed  a  generous  charity  and  a  fellow-feeling  for  the  suiifer- 
ing  and  distressed  such  as  the  world  had  never  till  then  witnessed. 
Food,  clothing,  and  all  manner  of  supplies  were  immediately  dis- 
patched to  meet  the  pressing  wants  of  the  moment,  and  millions 
of  dollars  in  money  were  collected  in  aid  of  our  stricken  people. 
As  much  of  this  greatly  needed  and  most  highly  prized  aid  and 
assistance  was  gathered  under  the  immediate  dictation  of  our 
brethren   representing  commercial   organizations,   an   acknowledg- 


442  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

merit  to  them  here  is  deemed  appropriate,  and  is  most  gratefully 
recorded.  Our  commercial  friends  in  St.  Louis,  Cincinnati,  and  Mil- 
waukee responded  upon  the  instant,  and  from  each  large  delegations 
of  prominent  citizens,  with  those  things  that  we  most  needed,  were 
promptly  in  our  midst,  and  set  at  once  to  the  benevolent  work  of 
feeding  the  hungry  and  clothing  the  destitute,  and  for  many  days 
their  representatives,  both  ladies  and  gentlemen,  remained  among 
us,  assisting  our  own  people  in  providing  shelter  and  care  for  the 
many  thousands  who  had  not  where  to  lay  their  heads.  Organiza- 
tions in  other  cities,  near  and  more  remote,  were  no  less  active  in 
our  behalf,  many  contributing  money  only,  others  contributing 
needed  supplies  quite  as  acceptable  and  quite  as  necessary.  It 
might  seem  invidious  to  mention  some,  to  the  omission  of  others, 
when  all  have  done  so  much,  but  as  public  acknowledgments  (save 
in  exceptional  cases)  do  not  appear  to  have  been  made,  except  for 
actual  cash  received  by  the  committee  having  charge  of  relief  mat- 
ters, it  may  here  be  stated  that  vast  amounts  of  aid  were  received 
in  various  kinds  of  supplies  from  (besides  the  cities  already  named) 
Boston,  New  York,  Buffalo,  Pittsburgh,  Allegheny  City,  Cleveland, 
Toledo,  Detroit,  Indianapolis,  Lafayette,  Logansport,  Fort  Wayne, 
Richmond,  Louisville,  Kansas  City,  Leavenworth,  Dubuque,  Bur- 
ling, Clinton,  Marshall,  Pella,  Cedar  Falls,  Quincy,  Galesburg, 
Mendota,  Peoria,  Ottawa,  Joliet,  Geneseo,  Springfield,  Decatur, 
Bloomington,  Aurora,  Dixon,  Rockford,  Freeport,  Oshkosh,  Ra- 
cine, and  many  other  cities  and  towns  not  within  the  knowledge 
of  the  writer.  Certain  it  is  that  over  two  hundred  and  fifty  car- 
loads of  supplies  were  received  as  the  result  of  the  first  gush  of 
sympathy  for  our  suffering  people.  Many  of  these  contributions 
arrived  ere  yet  the  smoke  had  cleared  away,  and  were  distributed 
either  by  delegates  sent  in  charge  or  by  such  organization  as  then 
existed.  In  order  to  assist  the  mayor  and  other  city  authorities, 
and  at  their  suggestion,  this  Board  appointed  a  committee  of  one 
hundred  of  its  members  to  assist  in  the  work  of  caring  for  these 
supplies,  and  under  their  direction  a  large  part  of  these  early  con- 
tributions were  properly  distributed,  the  work  being  performed 
with  care  and  fidelity,  and  as  much  of  prudence  and  discrimination 
as  the  circumstances  would  permit  or  justify.  That  these  supplies 
contributed  their  full  value  to  the  suffering  thousands,  then  if  ever 
needing  assistance,  none  who  shared  in  or  were  familiar  with  the 
work  of  distribution  will  question.  In  fact,  the  donors  here  alluded 
to  may  rest  in  the  consciousness  of  feeling  that  what  they  con- 
tributed, to  a  very  large  extent,  supplied  a  necessity  when  that 
necessity  was  most  keenly  felt.  They  have  their  reward  in  a  deep- 
seated  and  lasting  gratitude  on  the  part  of  the  beneficiaries  and  of 
every  citizen  of  Chicago  who  has  chosen  to  inquire  as  to  the  facts, 
or  who  was  an  attentive  reader  of  events  as  they  passed  immediately 
succeeding  the  fire. 

The  direct  loss  of  this  Board  consisted  mainly  in  its  hall  and 
office  furniture,  books  and  records ;  of  the  latter  it  will  be  found 
difficult  or  impossible  to  secure  a  restoration,  but  by  the  kindness 
of  sister  associations  and  societies,  already  many  volumes  have 
been  received  that  will  in  part  supply  our  necessities  in  that  regard. 


11871]  OF  THE  CITY  OF  CHICAGO  443 

A  loss  that  cannot  be  made  good,  and  which  the  patriotic  mem- 
bers of  the  Board  will  greatly  regret,  is  the  destruction  of  the  battle- 
worn  flags  and  other  mementoes  of  our  Board  of  Trade  regiments 
and  battery,  as  well  as  the  records  of  their  organization  and 
interesting  incidents  connected  therewith. 

The  building  occupied  by  the  Board  is  to  be  rebuilt  at  once — 
indeed,  within  less  than  a  week  of  its  destruction,  the  Chamber  of 
Commerce  corporation  had  decided  upon  its  restoration,  and  the 
work  was  immediately  commenced  and  has  been  prosecuted  with 
vigor  promising  completion  as  early  as  such  a  building  can  be 
properly  constructed,  and  it  is  now  expected  that  by  the  anniver- 
sary of  the  destruction  of  the  old  the  Board  will  be  in  occupancy 
of  the  new  building.  The  plans  adopted,  while  in  outline  much  the 
same  as  the  former  edifice,  will  be  more  tasteful  and  ornate,  and 
embrace  important  and  valuable  improvements  in  the  portion  de- 
voted to  office  purposes. 

The  rebuilding  of  the  city  has  been  prosecuted  with  marked 
rapidity — indeed,  many  substantial  business  structures  are  already 
completed  and  occupied,  and  others  well  advanced,  while  the  prep- 
aration in  the  way  of  removing  debris,  laying  foundation  walls,  and 
perfecting  plans,  has  been  pushed  with  all  possible  vigor,  and  with 
the  opening  spring  Chicago  will  rise  as  never  before  a  city  rose, 
and  it  is  now  confidently  expected  that  ere  the  lapse  of  two  years 
the  business  portion  of  the  city  will  be  restored  to  at  least  its  former 
beauty,  and  in  point  of  solidity  and  durability  vastly  superior  to 
the  old. 

The  residence  portion  will  be  slower  in  recovery,  thousands 
already  having  erected  temporary  residences  which  may  serve  the 
necessities  for  many  years,  or  at  least  until  fortune  may  enable 
them  to  do  better.  The  people  generally  are  cheerful  and  hopeful, 
and  notwithstanding  the  fearful  losses  sustained  it  may  with  truth 
be  repeated  that  the  future  of  Chicago  was  never  more  promising 
that  at  the  opening  of  the  year  1872. 

I  am,  Mr.  President,  very  respectfully, 
Your  obedient  servant, 

CHARLES  RANDOLPH,  Secretary. 

This  report,  together  with  the  following  tables  giving  the  price 
of  wheat,  corn  and  oats  on  the  1st  and  lOth  days  of  each  month 
from  January  1,  1865,  to  the  close  of  1871,  will  give  a  comprehen- 
sive view  of  the  entire  period  under  consideration.  The  following 
are  the  tables : 

The  expansion  of  wheat  exportation  during  the  Civil  War  was 
very  noticeable.  With  the  year  1865  a  reaction  set  in ;  the  years 
1868  to  1870  show,  however,  a  return  to  better  business.  There- 
after there  was  to  be  no  notable  setback  in  the  country's  exports  of 
wheat,  save  such  as  might  be  naturally  due  to  deficient  crops,  etc. 
The  exportation  of  flour  during  this  period  indicates  little  tendency 
towards  expansion.  The  time  of  Minneapolis,  and  of  flour  ground 
from  hard  wheat,  had  not  yet  arrived. 


444 


HISTORY  OF  THE  BOARD  OF  TRADE 


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OF  THE  CITY  OF  CHICAGO 


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[1871] 


OF  THE  CITY  OF  CHICAGO 


447 


The  following  tables  taken  from  the  fifteenth  annual  report  of 
the  Board  of  Trade  show  at  a  glance  the  growth  of  the  grain  and 
provision  interest  during  the  fifteen  years  prior  to  the  great  fire : 


-Cattle 


attle  and 

Hogs  at  Chicago — 

Hogs- 

1857-1871 

Shipped 

Received 

Shipped/ 

25,502 

244,345 

123,568 

42,638 

540,486 

192,013 

37.584 

271,224 

110,246 

97,474 

392.864 

227,164 

124,145 

675,902 

289,094 

112,745 

1,348,890 

491,135 

301,066 

1,956,873 

862,190 

253,439 

1,575,328 

659,392 

301,637 

849,311 

644,645 

268,733 

1,286,326 

576,099 

216,982 

1.987,120 

916,638 

217,897 

1,988,515 

1,247,713 

294,717 

1,852,382 

1,285,955 

391,709 

1,953,372 

1,095,67*5 

401,927 

2,652,549 

1,331,75^ 

Year.  Received 

1857 48,524 

1858 140,534 

1859 111,694 

1860 117.101 

1861 204.259 

1862 209,655 

1863 304,448 

1864 338.840 

1865 330,301 

1866 384,251 

1867 329,243 

1868 323,514 

1869 403,102 

1870 532,964 

1871 543,050 

On  the  average  dressed  hogs,  both  received  and  shipped,  ranged 
from  ten  to  twenty  per  cent  of  the  totals.  The  rapid  gain  of  the 
active  war  years,  and  the  big  slump  in  1865,  indicate  the  part  that 
that  event  had  in  building  up  the  pork-packing  industry  in  Chicago. 
This  slump,  was,  however,  but  temporary.  It  was  immediately  fol- 
lowed by  a  no  less  remarkable  advance. 


Beef  and  Pork 

Packing  in 

Chicago--1851-2  to  1871-2 ^^ 

Cattle. 

Hogs, 

Cattle, 

Hogs, 

Season 

packed 

packed 

Season 

packed 

packed 

1851-52.. 

..  21,806 

22,036 

1862-63.. 

.  59,687 

970,264 

1852-53.. 

. .  24.663 

44,156 

1863-64.. 

.  70,086 

904,659 

1853-54. . 

. .  25,431 

52,849 

1864-65.. 

.  92.459 

760,514 

1854-55.. 

. .  23,691 

73,694 

1865-66.. 

.  27,172 

507,355 

1855-56.. 

. .  28,972 

80,380 

1866-67.. 

.  25,996 

639,332 

1856-57.. 

. .  14,971 

74,000 

1867-68.. 

.  35,348 

796,226 

1857-58.  . 

. .  34,675 

99,262 

1868-69.. 

.  26,950 

597,954 

1858-59. . 

. .  45,503 

179,684 

1869-70. . 

.  11,963 

688,140 

1859-60. . 

. .  51,606 

151,339 

1870-71.. 

.  21,254 

919,197 

1860-61 . . 

. .  34,624 

271,805 

1871-72.. 

. .  16,080 

1,225,236 

1861-62.. 

..  53,763 

505,691 

A  comparison  of  the  figures  for  beef  packing  and  pork  packing 
shows  that  during  the  period  covered  they  did  not  travel  on  any- 
thing like  parallel  lines.  Indeed,  after  the  war  the  number  of  cattle 
packed  in  Chicago  decreased  heavily,  and  recovery  was  slow.  The 
following  gives  the  names  of  the  principal  beef  packing  concerns 


448  HISTORY  OF  THE  BOARD  OF  TRADE  [1871] 

engaged  in  this  industry  in  Chicago,  together  with  the  number  of 
cattle  handled  by  them  respectively  during  the  season  1870-71,  as 
shown  by  the  Supplementary  Report  of  the  Board  of  Trade: 
Armour  &  Co.,  4,156;  Culbertson,  Blair  &  Co.,  7,709;  John  L.  Han- 
cock, 1,949 ;  A.  E.  Kent  &  Co.,  7,440. 

The  following  is  a  list  of  the  pork  packers  in  Chicago  during  the 
season  1870-71.  Packers  and  numbers  of  hogs  packed:  Armour  & 
Co.,  65,878;  A.  Anthony,  5,500;  H.  Botsford  &  Co.,  76,550;  Bowers 
&  Co.,  3,199;  Henry  Brinkworth,  3,400;  Chicago  Packing  &  Pro- 
vision Company,  193,713;  Culbertson,  Blair  &  Co.,  89,184;  Davis, 
Knowles  &  Co.,  15,184;  Fernald  &  Crosby,  14,499;  John  L.  Hancock, 
35,392;  Geo.  W.  Higgins  &  Co.,  67,687;  O.  S.  Hough  &  Sons,  28,181 ; 
Kelley  Brothers,  30,228;  A.  E.  Kent  &  Co.,  106,791 ;  D.  Kreigh  &  Co., 
20,221 ;  Leland  &  Mixer,  8,765 ;  Milward,  Barron  &  Co.,  4,273 ;  B.  F. 
Murphy  &  Co.,  33,759;  John  Nash,  17,249;  S.  S.  Nutting  &  Co., 
3,200;  Oliver  &  Pierce,  3,548;  E.  G.  Orvis,  3,000;  Pyne,  Flannigan 
&  R.,  4,570;  G.  D.  Ruggles  &  Co.,  15,803;  A.  &  J.  Shaw,  6,500; 
Stower's  Packing  &  Provision  Company,  10,000;  Tobey  &  Booth, 
21,699;  other  packers,  31,234.  The  total  number  of  hogs  packed  in 
Chicago  in  the  season  of  1870-71  was  919,197. 

The  flour  manufacturing  industry  in  Chicago  was  in  anything 
but  a  healthy  condition  at  the  close  of  this  period.  After  a  very 
satisfactory  advance  following  the  war,  notably  in  1868,  a  decline 
set  in.  Of  course  the  last  year  was  exceptional,  owing  to  the  con- 
flagration of   1871,  which  destroyed  several  of  the  leading  mills. 

The  elevator  systems,  with  their  nominal  capacity,  in  1871, 
was  as  follows:  J.  &  E.  Buckingham  (1),  1,600,000  bushels;  Flint, 
Thompson  &  Co.  (2),  2,000,000  bushels;  Armour,  Dole  &  Co.  (2), 
2,100,000  bushels;  Munn  &  Scott  (4),  2,700,000  bushels;  Spruance. 
Preston  &  Co.  (1),  300,000  bushels ;  Edward  Hempstead  (1),  200,000 
bushels ;  total  capacity  of  the  eleven  elevators,  8,900,000  bushels. 

The  following  are  the  name  of  the  elevators  destroyed  by  fire, 
together  with  their  nominal  capacity  and  amount  of  grain  in  store 
at  time  of  the  great  fire,  October  9,  1871 : 

Nominal  Grain  in  store 

Name  capacity  at  time  of  fire 

Central  Elevator  A 700,000  533,090 

Munger  &  Armour's  Elevator 600,000  379,666 

Galena  Elevator  450,000  266,193 

Hiram  Wheeler's  Elevator 400,000  209,744 

National  Elevator   250,000  170,702 

Lunt's  Elevator 75,000                            

Totals   2,475,000  1,559,395 

With  a  few  words  upon  the  transportation  matter,  so  vital  to 
the  growth  and  development  of  commerce,  the  history  of  this  period 


Si- 

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[1871]  OF  THE  CITY  OF  CHICAGO  449 

from  the  close  of  the  war  to  the  great  fire  will  be  closed.     The 
Statistical  Abstract  for  1915,  issued  by  the  Department  of  Com- 
merce, Bureau  of  Foreign  and  Domestic  Commerce,  gives  the  fol- 
lowing interesting  figures  showing  the  increase  of  railroad  mileage 
from  1850  to  1871,  as  follows :    1850,  9,021 ;  1855,  18,374 ;  1860,  30,626 
1861,  31,286;  1862,  32,120;  1863,  33,170;  1864,  33,908;  1865,  35,085 
1866,  36,801;  1867,  39,250;  1868,  42,229;  1869,  46,844;  1870,  52,922 
1871,  60,301. 

This  period  was  distinguished  by  the  beginning  of  a  rapid  weld- 
ing of  short  connecting  railroads  into  long  lines  under  a  single 
ownership.  The  New  York  Central  and  the  Pennsylvania  Railroads 
are  good  examples  of  these  consolidations.  During  the  eleven  years 
• — 1860-1871 — the  railroad  mileage  of  the  United  States  nearly  dou- 
bled, and  this  activity  continued  until  the  panic  of  1873  checked  for 
a  time  the  building  of  new  railroads. 

The  Fast  Freight  Lines,  whose  cars  ran  over  several  railroads, 
were  organized  about  the  time  the  Civil  War  closed,  and  were  an 
important  factor  in  the  freight  business  of  the  country. 


CHAPTER  VII 
From  the  Great  Fire  to  the  Resumption  of  Specie  Payment  in  1879 

1872 

THE  first  business  day  of  1872  was  made  memorable  in  the  his- 
tory of  the  Board  of  Trade  by  a  visit  from  Grand  Duke  Prince 
Alexis  of  Russia.  The  Grand  Duke  made  a  tour  of  the  United 
States  at  this  time  and  he  was  everywhere  received  with  great  eclat, 
his  visit  being  regarded  as  an  expression  of  the  friendship  enter- 
tained for  the  United  States  by  the  Imperial  Russian  Government. 
The  Board  of  Trade  of  Chicago  was  always  a  center  of  attraction 
for  distinguished  guests.  The  members  felt  themselves  honored 
by  this  royal  visit  and  the  exchange  room  and  the  corridors  were 
filled  with  a  throng  which  cheered  wildly  when  the  Prince  appeared, 
being  met  at  the  doorway  by  President  Preston,  who  introduced 
him  on  'Change.  Prince  Alexis  made  a  brief  speech,  expressing  his 
gratitude  for  the  warm  welcome  and  his  admiration  for  the  indom- 
itable spirit  and  energy  which  Chicago  had  shown  in  the  face  of 
the  great  disaster  which  had  befallen  it  but  a  few  months  pre- 
viously. After  a  brief  stay  at  the  Chamber  of  Commerce  Building, 
prominent  members  of  the  Board  escorted  the  Prince  and  his  retinue 
to  the  stock  yards,  where  the  plant  of  B.  P.  Hutchinson,  then  the 
largest  in  Chicago,  was  inspected,  after  which  lunch  was  served  at 
the  Transit  House,  which  was  the  pride  of  the  live  stock  world  of 
the  West.  Another  distinguished  guest,  in  February,  was  Baron 
Iwakura  of  the  Japanese  Embassy,  who,  with  his  suite,  was  inspect- 
ing the  industries  of  this  country  for  the  benefit  of  his  nation,  which 
was  then  but  beginning  to  adopt  the  ways  of  western  civilization. 
President  Preston  introduced  the  Baron,  who  was  received  with 
cheers,  for  which  he  made  gracious  acknowledgment.  United  States 
Minister  to  Japan  De  Long  accompanied  Baron  Iwakura  and  spoke 
briefly  to  the  members  of  the  Board. 

Aside  from  these  social  functions  and  the  daily  routine  of  the 
market,  the  question  which  most  vitally  concerned  the  Board  of 
Trade  members  at  this  time  was  that  presented  by  the  warehouse 
situation.  It  was  quite  generally  admitted  that  state  inspection 
had  done  as  well  as  could  be  expected.  There  were  individual  com- 
plaints, but  the  Chicago  "Tribune,"  speaking  editorially,  praised  the 
new  commission,  and  stated  that  the  law  was  working  well  and 
that  there  seemed  to  be  an  improving  spirit  of  compliance  with  its 
provisions.  The  "Tribune"  pointed  out  that  from  August  7  to 
November  1,  1871,  nearly  twice  the  number  of  inspections  were 

450 


^^ 


[1872]  OF  THE  CITY  OF  CHICAGO  -  451 

made  as  in  the  corresponding  period  of  1870,  and  that  complaints 
had  not  increased  proportionately.  The  great  problem,  however, 
was  the  disposition  of  the  vast  quantities  of  grain  which  were  being 
received  in  Chicago  daily.  There  were  evidences  that  a  combina- 
tion existed  among  the  warehousemen^rf  connection  with  the  rail- 
roads, the  result  being  that  the  regular  warehouses  were  full  and 
those  outside  of  the  combine  were  empty.  Before  the  middle  of 
January  it  was  estimated  that  there  were  7,750,000  bushels  of 
grain  stored  in  the  city,  which  was  almost  the  complete  working 
capacity  of  the  elevators.  By  February  the  situation  was  still  more 
acute,  although  a  million  bushels  were  afloat  in  ships  in  the  harbor. 
Corn  on  track  was  3  cents  per  bushel  less  than  corn  in  store,  and  a 
virtual  blockade  existed,  which  depressed  prices  not  only  of  grain' 
but  of  hogs.  In  the  meantime  it  was  said  that  two  elevators  were 
nearly  empty  because  they  were  not  in  the  combine.  The  Illinois 
River  Elevator  (E.  Hempsted  &  Company)  brought  suit  against 
the  Northwestern  Railroad  to  compel  it  to  deliver  grain  to  the 
elevator.  The  incident  which  provoked  this  suit  was  that  the  Rock 
Island  Railroad  had  agreed  to  deliver  thirty  cars  to  the  elevator; 
fifteen  cars  were  delivered,  when  the  Northwestern  sent  an  engine 
onto  the  switch  to  prevent  any  further  delivery.  The  Rock  Island 
sent  two  engines  to  the  scene,  backed  the  Northwestern  engine  off 
the  switch  and  delivered  the  fifteen  additional  cars.  This  suit  and 
the  prompt  action  of  the  Rock  Island  Railroad  brought  about  a 
speedy  sale  of  the  elevator  to  Munn  &  Scott,  members  of  the  com- 
bine, for  the  sum  of  $70,000.  In  March  there  was  a  further  sensation 
when  Hugh  Meagher  seized  the  Iowa  Elevator,  owned  by  Spruance, 
Preston  &  Co.  This  was  done  by  force  and  the  occupants  of  the 
elevator,  one  of  whom  chanced  to  be  a  state  grain  inspector,  were 
thrown  out  into  the  mud.  The  police  were  called  and  the  elevator 
was  guarded  day  and  night  by  representatives  of  both  Meagher 
and  Spruance,  Preston  &  Company.  The  latter  company  made 
application  for  a  receivership,  and  Dr.  O.  A.  Turpin  was  appointed 
and  placed  in  possession  of  the  disputed  property. 

Master  in  Chancery  H.  Woodbridge,  in  whose  hands  had  been 
placed  the  disposition  of  the  funds  arising  from  the  sale  of  wheat 
stored  in  the  burned  elevators,  made  the  welcome  announcement, 
in  March,  that,  upon  proofs  of  ownership  being  made,  he  was  ready 
to  divide  the  money  received  from  the  sale.  It  was  in  this  month, 
also,  that  upon  the  petition  signed  by  one  hundred  members,  the 
Directors  instituted  a  daily  "call"  of  produce.  The  first  "call"  was 
made  on  Monday,  March  11,  and  did  not  prove  as  satisfactory  as 
had  been  expected.  The  "Tribune"  reported  that  there  were  no 
deals  in  provisions,  two  deals  in  wheat,  and  two  in  corn,  as  a  result 
of  the  call.  Other  matters  which  interested  the  Board  at  this  time 
were  the  proposal  of  a  combination  of  grain  shippers  to  build  a 
floating  warehouse;  and  a  resolution,  which  was  laid  over  until  the 


452  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

annual  meeting,  endorsing  the  project  of  building  a  three-track  air 
line  railroad  between  Chicago  and  New  York. 

The  annual  election,  held  April  1,  1872,  was  a  quiet  and  har- 
monious affair.  J.  W.  Preston  was  re-elected  President;  C.  E. 
Culver,  First  Vice-President;  W.  N.  Brainard,  Second  Vice-Presi- 
dent, and  C.  J.  Davis,  W.  N.  Sturges,  J.  R.  Bensley,  W.  E.  Rich- 
ardson and  B.  M.  Ford,  Directors.  Charles  Randolph  was  reap- 
pointed Secretary.  At  the  meeting  the  resolution  favoring  the  con- 
struction of  the  proposed  air  line  railroad  was  adopted,  and  at  an 
adjourned  meeting  held  April  3  the  rules  were  amended,  to  allow 
the  suspension  of  members  who  did  not  abide  by  the  decision  of 
the  Arbitration  and  Appeals  Committees.  It  was  provided  that 
members  carrying  matters  before  these  committees  must  first  agree 
in  writing  to  abide  by  their  decisions.  This  action  was  made  neces- 
sary by  a  court  ruling  that  decisions  of  these  committees  were  not 
legally  binding.  A  resolution  by  R.  S.  Whitney  was  adopted 
requesting  the  Directors  to  reduce  the  dues  for  the  coming  nine 
months  from  $20  to  $10  on  account  of  the  losses  which  the  mem- 
bers had  sustained  in  the  fire.  The  Directors  refused  this  request, 
stating  that  they  did  not  feel  it  right  to  draw  on  the  reserve  fund 
of  the  Board  in  order  to  meet  current  expenses,  and  that  this  would 
be  necessary  if  the  dues  were  reduced.  The  Directors  proposed, 
however,  that  thereafter  when  any  member  withdrew  or  died,  he  or 
his  heirs  should  receive  one-half  of  the  amount  of  the  current  initia- 
tion fees.  On  April  4  it  was  announced  that  the  bridge  across  the 
Missouri  River  between  Council  Bluffs  andOmaha  had  been  opened 
for  traffic,  this  being  the  last  link  in  the  steel  chain  which  united 
East  and  West.  On  May  3,  1872,  occurred  the  death  of  Samuel 
How,  who  was  one  of  the  oldest  and  most  highly  respected  mem- 
bers of  the  Board,  and  whose  death  caused  genuine  regret  and  grief. 

This  was  a  year  of  intense  activity  in  speculation,  and  there 
were  numerous  attempts  to  corner  the  market  in  grain  and  pro- 
visions. May  8,  owing  to  unfavorable  crop  reports  and  to  manipula- 
tion of  the  market,  wheat  went  up  7  cents  per  bushel.  There  were 
reports  that  a  corner  was  being  formed  on  wheat,  and  a  resolution 
was  introduced  to  declare  packing  houses  contiguous  to  the  river 
to  be  regular  warehouses  and  thus  to  increase  the  storage  capacity 
of  the  city.  This  was  said  to  be  a  scheme  of  the  wheat  shorts  to 
enable  them  to  deliver  grain  from  Milwaukee,  and  it  was  tabled. 

rin  June  the  attempt  to  corner  oats  brought  large  shipments  of  that 
grain  to  Chicago.  The  warehousemen  refused  storage  for  oats, 
and  the  railroad  companies  placed  an  embargo  upon  shipments 
claiming  that  they  could  not  be  stored.  This  action  caused  much 
indignation  among  the  members  of  the  Board.  It  was  reported 
that  there  were  150  cars  of  oats  on  the  tracks  which  the  ware- 
housemen had  refused  to  receive.  A  meeting  was  held  in  the 
Directors'  room  at  which  S.  H.  McCrea  presided  and  C.  E.  Culver 


.'rdwtf^ 


[1872]  OF  THE  CITY  OF  CHICAGO  453    J 

acted  as  secretary.  A  resolution  was  passed  condemning  the  action 
of  the  railroads  and  appointing  a  committee  of  three  to  confer  with 
the  officials  of  the  Chicago  &  Northwestern,  and  the  Chicago,  St. 
Louis  &  Alton.  This  committee  reported  that  the  railroads  claimed 
that  they  feared  losses  in  receiving  shipments  of  oats,  and  that 
owing  to  the  condition  of  the  market  oats  were  held  in  storage  while 
corn  was  not.  The  elevator  men  made  a  similar  answer.  Mr.  Munnu' 
of  the  iirm  of  Munn  &  Scott  stated  the  position  of  the  elevator  men, 
and  P.  R.  Chandler,  who  was  the  chief  manipulator  in  the  corner 
on  oats,  and  who  was  said  to  own  at  least  one  million  bushels  out 
of  the  1,200,000  bushels  then  in  storage,  offered  to  take  and  pay 
for  all  oats  that  might  be  delivered  in  good  condition.  He  said 
that  he  could  not  ship  except  at  a  loss  of  from  5  to  6  cents  per 
bushel.  The  Chicago  &  Alton  denied  that  they  had  refused  to 
receive  oats,  and  there  were  threats  of  suits  on  the  part  of  those 
who  had  oats  ready  to  ship  but  who  were  prevented  from  doing  so. 
C.  J.  Davis,  C.  E.  Culver  and  A.  M.  Wright  were  appointed  as  a  com- 
mittee to  investigate  the  matter  further.  The  Burlington  road 
announced  that  it  had  arranged  for  storage  and  was  giving  special 
facilities  for  the  shipment  of  oats.  The  Northwestern  and  the 
Alton  denied  the  existence  of  a  plot,  and  announced  that  they  were 
ready  to  ship  oats,  but  that  there  was  no  storage  room.  The  Munn  •^ 
&  Scott  elevators  were  full.  Armour,  Dole  &  Company  said  they 
would  make  no  discrimination  against  oats  and  would  add  room 
for  200,000  bushels  of  oats  at  once  and  would  also  accommodate 
100,000  bushels  in  their  transfer  house.  The  Northwestern  agreed 
to  deliver  200,000  bushels  each  to  the  Chicago  Dock  Company  and 
to  A.  E.  Neely  &  Company.  The  committee  reported  recommend- 
ing that  receipts  from  these  added  warehouses  be  declared  regular. 
A  resolution  to  this  effect  was  brought  before  a  full  meeting  of  the 
Board  and  created  much  ill-feeling,  although  it  was  finally  adopted. 
The  warehousemen  declared  this  action  an  outrage,  and  the  men 
interested  in  the  corner  declared  they  would  not  accept  receipts 
from  the  Chicago  Dock  Company.  It  was  reported  on  'Change  that 
agents  of  the  Northwestern  had  been  notified  not  to  receive  ship- 
ments of  any  kind  of  grain  for  Chicago.  As  the  price  of  oats  went 
up  the  feeling  among  the  members  increased,  and  this  was  not 
allayed  by  the  announcement  that  while  the  Union  elevator  had 
agreed  not  to  discriminate  against  grain  shipped  via  the  Alton  Rail- 
road, no  oats  had  been  accepted  for  storage.  The  general  superin- 
tendent of  the  Chicago  &  Alton  declared  that  a  large  number  of 
cars  of  oats  had  been  refused  by  the  Union  elevator  on  account  of 
their  having  no  room,  and  he  said  the  Alton  would  be  willing  to 
deliver  to  any  warehouse  which  they  could  reach.  Mr.  Hitchcock, 
attorney  for  the  Board  of  Trade,  rendered  an  opinion  that  receipts 
given  by  the  newly  authorized  warehouses  would  not  be  regular  for 
delivery  on  contracts  made  prior  to  June  7,  but  indicated  that  they 


454  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

would  be  on  contracts  made  after  that  date.  Those  interested  in 
the  corner  refused  to  abide  by  this  opinion  and  declared  they  would 
not  accept  receipts  in  any  save  the  old  regular  warehouses.  On 
June  15  the  "Java"  took  a  cargo  of  100,000  bushels  of  oats  from  the 
Illinois  elevator.  It  was  found,  however,  that  the  space  thus  left 
vacant  had  already  been  contracted  for  either  to  be  filled  with  corn 
or  to  be  left  idle.  This  episode  created  much  feeling.  The  manipu- 
lators of  the  corner  were  strong  and  confident  until  about  the  mid- 
dle of  June.  It  was  their  announced  intention  to  hold  the  price 
at  not  less  than  41  cents  per  bushel.  Their  plan  was  first,  to  buy 
all  the  oats  actually  in  the  market ;  second,  to  buy  all  that  the  bears 
would  sell  for  June  delivery,  and,  third,  to  sell  "puts"  for  the  month 
at  about  41  cents  per  bushel.  It  was  stated  that  these  "puts"  were 
peddled  about  the  city,  inducing  speculation  on  the  part  of  large 
numbers  of  people  not  ordinarily  in  the  market.  Some  $25,000 
worth  of  these  "puts"  were  said  to  have  been  sold,  and  the  money 
used  to  strengthen  the  market.  However,  Mr.  Chandler  and  his 
friends  had  not  counted  upon  the  great  inrush  of  oats  attracted  to 
Chicago  by  the  higher  prices.  The  receipts  during  June  were  for 
that  time  enormous,  and  every  effort  was  made  to  deliver  them 
into  store.  Public  opinion  was  decidedly  against  the  would-be 
corners,  and  representations  were  made  to  Chandler's  backers  not 
to  aid  in  blocking  commerce,  and  these  representations  were  said 
to  have  had  some  effect  in  preventing  Mr.  Chandler  from  securing 
sufficient  funds  to  consummate  the  deal.  On  the  evening  of  June 
17  there  were  rumors  that  Chandler  was  in  financial  difficulties. 
In  the  morning  of  June  18,  Chandler,  Pomeroy  and  Noyes,  brokers 
for  P.  R.  Chandler,  took  all  the  oats  delivered  up  to  11  a.  m.,  paying 
in  certified  checks.  At  11  o'clock  they  took  advantage  of  the  rule 
permitting  brokers  to  refuse  deliveries  made  between  the  hours 
of  11  and  1.  It  was  rumored  that  Mr.  Chandler  was  out  among  the 
banks  seeking  to  raise  funds,  and  this  report,  together  with  the 
closed  offices,  before  which  a  long  line  had  gathered,  started  the 
price  downward  with  a  rush.  In  a  few  moments  the  price  fell  to 
35  cents,  rallying,  however,  to  37  cents.  In  the  early  afternoon  the 
suspension  of  the  firm  of  Chandler,  Pomeroy  &  Noyes  was 
announced,  and  the  price  fell  to  31  cents.  P.  R.  Chandler,  who  was 
at  the  head  of  this  manipulation,  was  superintendent  of  the  Union 
Stock  Yards.  He  was  the  father  of  the  Chandler  of  the  Chandler, 
Pomeroy  &  Noyes  firm.  Mr.  Noyes  had  withdrawn  from  the  firm 
in  November,  1871,  and  was  not  involved  in  the  suspension.  The 
losers  in  this  corner  were  many.  Banks  had  advanced  money  on 
oats  at  from  30  to  35  cents  per  bushel,  which  was  in  excess  of  the 
market  price  after  the  crash,  involving  the  banks  in  loss.  Mr. 
Chandler  repudiated  the  transactions  in  privileges,  thus  creating 
a  large  number  of  small  losers.  The  firm  of  Chandler,  Pomeroy  & 
Noyes  was  of  good  financial  rating  and  but  few  margins  had  been 


[1872]  OF  THE  CITY  OF  CHICAGO  455 

called  for.  However,  during  the  last  days  of  the  deal  the  shrewder 
traders  sold  to  other  parties,  rather  than  to  Mr.  Chandler.  Public 
indignation  against  Chandler  was  very  strong,  and  this  was  directed 
also  against  the  warehousemen,  who  were  alleged  to  have  been  in 
the  plot  to  prevent  the  storage  of  oats.  A  sign  posted  in  the 
exchange  hall  read  as  follows :  "First  stage — plenty  money,  no 
wheat.  Second  stage — plenty  wheat,  no  money.  Third  stage — 
no  wheat,  no  money."  An  instance  of  how  the  corner  operated  to 
the  injury  of  innocent  parties  was  given  in  the  "Tribune,"  which 
stated  that  a  man  at  Whiteside,  Illinois,  sold  15,000  bushels  of  his 
own  oats  on  the  Chicago  markets,  before  the  corner  was  started, 
at  38  cents  per  bushel,  to  be  delivered  in  June.  The  blockade  of 
railroad  and  warehouse  facilities  made  it  impossible  for  him  to 
make  the  actual  delivery,  and  he  was  forced  to  buy  from  the  manipu- 
lators at  43  cents  to  settle  his  contract.  When  his  oats  reached 
the  market  they  sold  for  31  cents  per  bushel,  and  the  shipper  had 
a  loss  of  12  cents  per  bushel  on  his  own  oats.  The  price  of  oats 
tended  steadily  downward  on  account  of  the  heavy  selling,  and 
there  was  no  material  recovery  during  the  remainder  of  the  year. 
In  the  latter  part  of  July  the  oats  held  by  Chandler  were  shipped 
by  those  who  had  advanced  money  to  him,  and  there  was  talk  of 
legal  action  against  Mr.  Chandler,  but  nothing  was  done.  This  was 
in  some  respects  the  most  spectacular  failure  to  control  the  market 
that  the  Board  of  Trade  had  known.  Prices  of  other  produce  were 
affected  by  the  fall  in  oats  and  wheat  lost  20  cents  in  the  week  fol- 
lowing the  crash. 

Contrary  to  the  usual  precedent,  Mr.  Preston  had  been 
re-elected  President  of  the  Board  in  recognition  of  his  work  during 
the  period  after  the  fire,  and  in  order  that  he  might  remain  at  the 
head  of  the  Board  of  Trade  until  its  new  building  was  completed. 
The  work  on  this  building  was  being  pushed  rapidly  and  the  mem- 
bers took  great  pride  in  its  progress,  and  in  its  superiority  over  the 
old  structure.  The  "Tribune"  of  June  24,  speaks  of  the  frescoing 
as  follows :  "The  frescos  for  the  Chamber  of  Commerce  building 
are  a  great  improvement  over  those  of  the  old  structure,  the  designs 
are  highly  elaborate,  the  central  ellipse,  20  by  30  feet,  will  give  a 
view  of  the  sky,  and  north  of  this  will  be  a  panel  representing  Mer- 
cury and  Ceres,  the  genie  of  Commerce  and  Agriculture.  The  oppo- 
site panel  will  represent  the  Fine  Arts  in  the  persons  of  Apollo  and 
Minerva.  The  ceiling  will  show  the  coats  of  arms  of  the  state  of 
Illinois  and  of  the  United  States.  There  will  be  two  most  imposing 
scenes,  one  showing  Chicago  before  and  after  the  fire,  and  the  other 
showing  the  burning  city.  P.  M.  Almini  &  Company  have  the  fres- 
coing in  charge." 

Among  the  minor  matters  of  interest  to  the  members  during  the 
midsummer  months  of  1872  were  the  establishment  of  a  rule  that 
notice  of  withdrawal  from  membership  must  be  posted  for  ten  days 


4S6  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

in  order  to  ascertain  that  the  member  was  in  good  standing;  the 
return  of  a  verdict  of  guilty  against  the  warehousemen  who  had 
been  indicted  for  not  taking  out  Hcenses  under  the  warehouse  law; 
the  record  trip  of  the  propeller  "Alaska,"  which  delivered  grain  to 
New  York  (via  Erie  Railroad  from  Erie)  in  ten  days,  exclusive  oi 
Sundays  and  the  days  of  receipt  and  delivery,  and  the  announce- 
ment that  out  of  insurance  losses  of  $96,000,000  on  account  of  the 
Chicago  fire,  $38,000,000  had  been  paid  and  $53,000,000  were  then 
unpaid,  salvage  and  discount  amounting  to  about  $5,000,000. 

The  next  great  market  excitement  was  due  to  a  corner  on 
pork.  This  had  been  in  progress  quietly  for  some  time,  but  did 
not  attract  general  attention  until  the  latter  part  of  July,  when  it 
was  stated  that  the  shorts  in  order  to  cover  were  having  Louisville 
pork  repacked  and  sent  to  Chicago,  and  it  was  reported  that  the 
buyers  were  not  allowed  to  inspect  this  pork  in  the  packing  house, 
and  that  they  would  refuse  to  accept  repacked  pork.  By  July  30 
the  corner  was  fully  developed ;  it  was  declared  to  be  a  "war  of 
giants,"  and  the  syndicate  was  said  to  have  paid  out  $1,250,000  and 
to  have  millions  more  on  deposit  here.  Pork  from  Cincinnati  and 
Louisville  was  shipped  here  in  large  quantities  and  passed  inspec- 
tion, and  the  Governor  General  of  Canada  was  reported  to  be  one 
of  the  heavy  backers  of  the  deal.  It  was  charged  that  the  rules 
against  repacking  and  rebranding  were  being  violated.  It  was  in' 
the  midst  of  these  cornering  operations  (for  a  like  deal  was  in  prog- 
ress in  the  wheat  market)  that  Alex  Murison  introduced  a  resolu- 
tion amending  the  rule  as  follows:  "Provided,  that  in  estimating 
the  market  price  of  property,  in  all  cases,  the  legitimate  value  of 
the  property  for  shipment  to  other  markets  shall  alone  be  con- 
sidered." This  rule  in  substance  was  later  adopted.  By  the  3rd 
of  August  it  was  stated  that  the  pork  manipulators  held  130,000 
barrels  of  pork — more  than  were  packed  in  the  city  the  previous 
season,  and  that  there  was  more  pork  to  come,  as  other  cities  were 
glad  to  unload  on  Chicago.  In  the  meantime  the  corner  in  wheat 
began  to  attract  more  attention.  On  August  2  there  was  a  general 
call  for  margins,  and  on  the  3rd  it  was  rumored  that  large  ship- 
ments of  wheat  were  being  made  from  Milwaukee  for  the  benefit 
of  the  shorts.  On  August  5  the  Flint  &  Thompson  elevator  received 
the  first  shipment  of  new  spring  wheat,  which  was  reported  in  good 
condition ;  and  it  was  stated  that  receipts  of  750,000  bushels  were 
expected  during  the  month,  and  that  36,000  bushels  had  been 
received  from  Milwaukee,  which  showed  a  good  profit.  It  was 
at  this  time  that  Mr.  Murphy  oflfered  an  amendment  to  the  rules 
to  the  efifect  that  both  parties  to  a  trade  should  be  required  to  deposit 
the  same  amount  of  margin.  The  idea  of  the  amendment  was  to 
protect  the  shorts  as  well  as  the  longs,  and  the  Chandler  episode 
was  cited  as  a  case  in  point.  On  August  5  the  Iowa  elevator,  owned 
by  Hugh  Maher,  was  burned,  and  the  loss  of  grain  in  storage  was 


[1872]  OF  THE  CITY  OF  CHICAGO  457    ) 

reported  as  128,000  bushels  of  corn  and  47,000  bushels  of  oats.  The 
receipts  issued  by  the  Iowa  elevator  were  "regular,"  but  were  said 
not  to  have  been  generally  bankable.  The  loss  was  estimated  at 
$100,000.  A  scandal  which  stirred  the  whole  exchange  followed 
this  fire.  According  to  the  warehouse  registration  books  the  ele- 
vator contained  82,000  bushels  of  corn.  Mr.  Maher  stated  that  the 
house  contained  154,000  bushels  and  admitted  that  receipts  were 
outstanding  for  269,000  bushels,  while  others  claimed  that  receipts 
were  outstanding  for  313,000  bushels.  Mr.  Maher  admitted  that 
he  sold  cargoes  f.  o.  b.  and  bought  receipts  of  other  houses  to  equal 
the  difference.  It  was  freely  charged  on  'Change  that  receipts! 
had  been  sold  on  the  market  after  the  grain  had  been  shipped  on\ 
which  the  receipts  were  issued.  It  was  urged  that  the  registration 
system  was  inadequate  and  that  the  warehouse  law  failed  to  prevent 
fraud.  The  situation  worked  an  injury  upon  the  owners  of  the 
grain  supposed  to  be  in  this  warehouse  on  account  of  the  insurance, 
the  companies  refusing  to  pay  losses  for  grain  not  in  store.  W.  N. 
Brainard,  C.  J.  Blair  and  J.  McGlashen  were  appointed  as  a  com- 
mittee to  look  after  the  owners'  interests.  Mr.  Maher  promised 
to  pay  all  losses  providing  there  was  no  prosecution,  and  it  was 
admitted  that  receipts  were  oustanding  for  more  than  the  capacity 
of  the  elevator  by  165,000  bushels.  On  August  8  a  resolution  intro- 
duced by  Robert  Warren  was  unanimously  adopted  calling  on  the 
warehouse  commission  to  prosecute  the  guilty  parties.  ,  The  dam-^ 
aged  grain  in  the  burned  elevator  was  sold  at  auction.  /This  scandal 
called  attention  to  general  warehouse  conditions,  and7~on  August 
13,  the  "Tribune"  alluded  to  the  fact  that  the  Munn  &  Scott  elevators 
reported  626,650  bushels  of  corn  in  store,  while  the  registrar 
reported  but  417,501  bushels.  In  wheat  the  same  discrepancy  was 
said  to  exist,  as  Munn  &  Scott  reported  245,000  bushels  and  the 
registrar  178,000  bushels.  It  was  claimed  that  the  statement  of 
receipts  and  shipments  showed  a  difference  of  1,531,343  bushels, 
and  the,  demand  was  made  that  the  grain  in  the  elevators  be  meas- 
ured. The  excitement  of  the  wheat  corner  steadily  increased  and 
the  Milwaukee  dealers  and  the  farmers  generally  throughout  the 
West  rushed  their  wheat  to  the  Chicago  market,  meeting  the  usual 
obstacles  of  lack  of  cars  and  storage.  It  was  stated  that  the  elevator 
men  and  some  bankers  were  interested  in  the  corner  and  that  wheat 
storage  was  refused.  On  August  17  it  was  announced  that  a  cargo 
of  25,000  bushels  of  wheat  had  been  ordered  from  Buffalo.  In  the 
meantime  a  settlement  was  proposed  in  the  Iowa  elevator  case,  the 
insurance  companies  to  pay  28.13  per  cent  of  the  loss  and  Maher  to 
pay  65  per  cent  on  account  of  the  bogus  receipts,  and,  under  the 
pressure  of  public  opinion,  all  the  warehousemen,  but  one,  con- 
sented to  an  investigation  of  the  amount  of  grain  in  store.  The 
shipments  of  wheat  were  becoming  immense.  It  was  stated  that 
Des  Moines  was  shipping  100  cars  daily,  and  that  every  bin  in  the 


HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

'West  was  being  scraped  for  wheat  for  the  Chicago  market.  Under 
the  pressure  of  these  heavy  receipts  the  wheat  market  declined  two 
cents  on  the  17th  and  on  the  19th  of  August  "a  regular  panic"  set 
in,  and  seller  the  month  declined  nearly  30  cents  more,  and  an 
additional  16  or  17  cents  the  following  day.  The  collapse  came 
suddenly  when  Des  Moines  parties  called  for  large  margins,  which 
the  manipulators  were  unable  to  put  up.  Wheat  declined  47  cents 
in  little  more  than  twenty-four  hours.  J.  B.  Lyon,  who  was  at  the 
head  of  the  manipulation,  having  told  his  associates  to  save  them- 
selves if  possible.  This  was  the  greatest  wheat  corner  ever  known 
up  to  that  time  on  the  Chicago  Board  of  Trade.  It  was  operated  by 
John  B.  Lyon  and  Thomas  Chisholm  of  Toronto,  and  with  them 
were  associated  the  elevator  firms  of  Munn  &  Scott,  and  Hugh 
Maher,  proprietor  of  the  Iowa  elevator.  The  combine  began  as 
early  as  the  middle  of  June,  purchasing  through  a  number  of  brokers 
all  the  wheat  they  could  get  for  August  delivery,  and  covered  their 
tracks  so  well  that  they  had  bought  over  3,000,000  of  "shorts" 
before  the  scheme  was  suspected.  When  it  did  become  known  the 
price  of  August  wheat  rapidly  advanced.  "Seller  August"  sold  at 
$1.19  in  the  early  part  of  July,  but,  under  the  influence  of  very  Hght 
receipts,  and  the  belief  that  the  stock  of  old  wheat  in  the  country 
was  about  exhausted,  it  ran  up  to  $1.61  >4  before  the  final  explosion 
came.  The  Liverpool  and  New  York  market  failed  to  respond  for 
some  time,  but  began  to  advance  towards  the  end  of  July,  and  prices 
at  these  points  moved  upward  by  irregular  jumps.  This  enabled 
the  combine  to  ship  out  wheat  until  the  very  last  so  that  they  kept 
the  stock  in  store  very  low  compared  with  what  is  usual  in  case  of 
a  corner.  At  the  time  of  the  break-up,  which  occurred  Monday  and 
Tuesday,  August  19  and  20,  there  were  only  800,000  bushels  of 
wheat  of  all  grades  in  store  in  Chicago,  and  very  much  of  this  was 
of  the  crop  of  1872.  One  contributing  cause  of  the  downfall  of  the 
corner  was  the  receipts  by  the  banks  of  Chicago  of  an  admonition 
from  the  Comptroller  of  the  Currency  that  they  must  adhere 
strictly  to  the  terms  of  the  law,  under  which  they  were  not  allowed 
to  loan  more  than  10  per  cent  of  their  capital  to  any  one  man  or  firm. 
The  banks  so  informed  the  Lyon  combine,  and,  as  the  latter  could 
not  raise  funds  even  on  good  collateral,  they  were  unable  to  carry 
out  fully  their  tactics  of  purchasing  all  the  wheat  that  came  in. 
The  combine  had  bought  some  4,000,000  or  5,000,000  bushels  of 
August  wheat  and  were  supposed  to  have  settled  up  all  but  about 
a  million  bushels  at  an  average  profit  of  nearly  forty  cents  per 
bushel.  The  smash-up  resulted  in  the  suspension,  temporary  in 
most  cases,  of  about  twelve  firms,  and  at  the  end  of  the  week  J.  B. 
Lyon  &  Co.  called  a  meeting  of  their  creditors,  at  which  a  proposi- 
tion to  settle  at  25  cents  on  the  dollar  was  made.  Before  the  corner 
collapsed  the  principal  "shorts"  had  offered  to  settle  at  $1.50,  and 
when  this  was  refused  they  had  sent  out  to  all  the  neighboring 


11872]  OF  THE  CITY  OF  CHICAGO  4S9 

states  to  have  wheat  shipped  at  once.  The  receipts  for  the  first  week 
of  August  were  71,000  bushels,  the  second  week  158,000  bushels, 
the  week  ending  August  17,  454,000  bushels,  and  on  August  20  they 
were  193,000  bushels.  It  was  rumored  that  Munn  &  Scott  had  failed, 
but  they  weathered  the  storrh.  Country  dealers  were  heavy  losers. 
One  result  of  these  manipulaftions  was  a  petition  by  bankers  and 
business  men  of  Chicago  urging  warehousemen  not  to  deliver  grain 
on  orders  to  ship  until  the  receipts  had  been  cancelled  by  the  grain' 
registrar.  Further,  the  warehouse  commission  proceeded  to  meas- 
ure the  grain  in  the  elevators  and  employed  Mr.  Hitchcock  to  prose- 
cute Hugh  Maher.  The  feeling  against  Mr.  Lyon  was  particularly 
strong  when  he,  at  first,  refused  to  endorse  margin  checks  for  money 
deposited  by  his  firm  as  security  on  contracts.  Later  he  agreed  to 
sign  margin  checks,  but  his  expulsion  was  demanded  by  members 
of  the  Board,  and  the  Directors  held  a  meeting  at  which  Lyon  was 
suspended.  These  manipulations  led  to  various  attempts  to  amend 
the  rules,  and  on  August  28  a  rule  was  proposed  by  a  joint  com- 
mittee of  Board  of  Trade  members  of  Milwaukee  and  Chicago, 
which  came  up  for  action  September  2  and  was  designed  to  protect 
both  parties  to  trades  against  any  loss  in  the  event  of  the  failure  of 
either  to  meet  engagements  by  aflfording  means,  which,  if  availed 
of,  would  furnish  ample  margin.  Upon  motion  of  W.  N.  Brainard, 
however,  the  following  substitute  was  adopted : 

"On  time  contracts  purchasers  shall  have  the  right  to  require  of 
sellers,  as  security,  ten  per  cent  margins  {jased  upon  the  contract 
price,  and  further  security,  to  the  extent  of  any  advance  in  the 
market  above  said  price.  Sellers  shall  have  the  right  to  require, 
as  security  from  buyers,  ten  per  cent  margins  on  the  contract  price 
of  the  property  sold,  and,  in  addition,  any  difference  that  may  exist 
between  the  intrinsic  value  and  the  price  of  sale.  In  case  of  decline 
in  the  intrinsic  value  of  any  such  propery,  sellers  may,  from  time  to 
time,  require  of  buyers  additional  security  to  the  extent  of  any  such 
decline.  All  such  security  or  margins  to  be  deposited  with  the 
Treasurer  of  the  Association,  unless  otherwise  agreed  upon  by  the 
parties.  In  determining  the  intrinsic  value  of  property  under  this 
rule,  its  value  for  shipment  to  eastern  or  southern  markets,  or  for 
manufacturing,  shall  alone  be  considered,  irrespective  of  any  ficti- 
tious price  it  may,  at  the  time,  be  selling  for  in  this  market,  and  in 
case  of  a  disagreement  between  the  parties  as  to  such  value,  it  shall 
be  determined  by  the  Secretary,  or,  in  his  absence,  by  the  President 
of  the  Board  of  Trade,  under  the  control  and  approbation  of  the 
Board  of  Directors." 

The  settlement  of  accounts  with  the  various  suspended  firms 
was  long  drawn  out  and  occasioned  much  litigation  and  many  con- 
troversies. The  creditors  of  P.  R.  Chandler  and  Chandler,  Pomeroy 
&  Co.  were  served  on  September  10  with  the  notices  usual  in  cases 
of  bankruptcy.  The  indebtedness  was  somewhere  in  the  neighbor- 
hood of  $700,000,  which  did  not   include  the  "puts"  on  oats,   but 


460  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

did  include  some  on  wheat.  In  consequence  of  this,  the  owners 
of  the  oats  privileges  held  a  meeting  to  devise  measures  to  pro- 
tect their  interests.  There  was  also  a  meeting  of  the  creditors  of 
F.  J.  Diamond,  at  which  Messrs.  Sturges,  Ranney  and  Cooky  were 
appointed  a  committee  to  prepare  a  list  of  creditors  and  to  report 
at  a  later  meeting.  At  this  meeting  it  was  reported  that  Diamond's 
liabilities  were  $150,000  and  that  he  had  left  the  city  and  had  taken 
his  books  with  him,  and  that  R.  S.  Jenning  was  also  missing.  Later 
it  was  reported  that  Diamond  was  seen  in  New  York,  but  he  did 
not  return  to  Chicago  and  no  satisfactory  settlement  of  his  affairs 
was  obtained.  Although  suspended  from  the  Board,  Lyon  &  Co. 
continued  in  the  grain  business,  acting  through  brokers,  and  it  was 
reported  that  Xhey  had  shipped  fifty-seven  cargoes  of  grain  since 
their  failure,  i  In  the  latter  part  of  September,  Munn  &  Scott  dis- 
posed of  their  interest  in  the  Union,  City,  Northwestern,  and  Munn 
&  Scott  elevators  to  George  Armour,  who  continued  the  business 
under  the  firm  name  of  George  Armour  &  Co.  It  developed  later 
that  this  action  was  necessary  on  account  of  the  financial  losses 
Munn  &  Scott  had  sustained  and  as  receipts  in  their  elevators  were 
discredited  and  were  not  bankable.  This  left  the  warehouses  of 
the  city  in  the  hands  of  J.  &  E.  Buckingham,  Flint  &  Thompson, 
Armour,  Dole  &  Co.,  Munger,  Wheeler  &  Co.,  and  George  Armour 
&  Co.  Five  firms  which  included  eight  men,  all  of  whom,  it  was 
said,  were  "intermarried"  commercially.  While  the  matter  was 
kept  as  quiet  as  possible  at  the  time,  it  developed  later  that  these 
warehousemen  had  been  in  virtual  combination  for  some  time,  each 
owning  stock  in  all  the  warehouses.  It  was  suspected  that  Munn 
&  Scott  had  large  overissues  of  receipts  for  grain,  and  in  order  to 
protect  the  market  and  their  own  interests  Mr.  George  Armour 
took  charge  of  the  Munn  &  Scott  elevators  and  quietly  made  pur- 
chases of  grain  in  order  to  make  the  outstanding  receipts  good. 
This  action  prevented  a  panic  on  the  Chicago  Exchange,  whic 
must  have  followed  had  all  the  facts  been  known  at  the  time.  On 
September  24,  Chandler,  Pomeroy  &  Co.  were  suspended  from  the 
Board  of  Trade  and  on  the  26th  a  meeting  of  creditors  was  held  at 
which  G.  M.  How  presided.  The  creditors  were  divided  in  their 
interests  by  the  question  as  to  whether  the  many  privileges  sold 
by  the  firm  should  be  recognized  or  not.  At  the  request  of  Wirt 
Dexter,  Mr.  Kent  had  been  appointed  assignee,  but  there  were 
numerous^abjections  to  this,  and  Mr.  Spruance  was  finally  selected. 
A  large  number  of  workmen  and  business  men  had  been  at- 
tracted to  Chicago  by  the  great  activity  in  rebuilding,  which  began 
immediately  after  the  fire.  There  were  also  brought  to  the  city  a 
large  number  of  undesirable  citizens  and  crime  of  every  kind  was 
rampant.  Reputable  citizens  finding  the  police  unable  to  meet  the 
situation,  formed  a  large  association  for  the  enforcement  of  law 
and  order,  and,  on  the  evening  of  September  26,  the   Board  of 


Market    and    Washington    Streets    Where   the    Board    Met    After   the    Fire    of 

October,    1871. 


Laying  Cornerstone,   Board  of  Trade.  1872. 


{1872]  OF  THE  CITY  OF  CHICAGO  461 

Trade  rooms  were  thrown  open  to  a  meeting  at  which  2,000  of  the 
best  men  of  Chicago  entered  their  protest  against  crime.  Another 
indication  of  the  unsettled  times  is  found  in  the  agreement  to 
abandon  the  "call,"  the  "Tribune"  stating  that  the  real  reason  was 
that  under  the  "call"  traders  were  obliged  to  deal  with  all,  and 
that  there  were  a  number  with  whom  they  did  not  wish  to  do 
business.  At  a  meeting  of  the  directors  held  October  1,  resolutions 
were  passed  for  the  expulsion  of  Isaac  Meyer,  James  Baxter  and 
VV.  S.  Forrey  of  the  firm  of  Meyer,  Baxter  &  Co.,  who  were  accused 
of  defrauding  A.  O.  Ticknor  out  of  a  large  sum  by  false  entries. 
Under  the  rules  this  matter  was  brought  before  the  full  Board ; 
A.  M.  Wright,  W.  N.  Brainard  and  J.  R.  Bensley  formed  the  prose- 
cuting committee.  After  discussion  the  case  was  referred  back 
to  the  directors,  and  after  hearing  much  evidence  the  directors 
again  reported  in  favor  of  expulsion.  The  accused  made  a  vigorous 
fight  and  circulated  a  pamphlet  containing  the  testimony  in  full. 
The  case  came  before  the  Board  on  November  6,  and  the  trial  was 
replete  with  sensation.  C.  E.  Culver  spoke  in  favor  of  expulsion, 
and  Mr.  Baxter  in  turn  impugned  Culver's  motives  and  accused 
Mr.  Ticknor  of  attempting  blackmail.  As  a  result  of  the  trial  Mr. 
Baxter  was  expelled  and  Mr.  Meyer  and  Mr.  Forrey  were  not. 

In  October,  not  quite  a  year  after  the  fire,  the  new  Chamber 
of  Commerce  building  was  ready  for  occupancy.  It  was  announced 
that  the  Treasurer  of  the  Board,  or  rather  the  Corn  Exchange 
National  Bank,  would  be  located  in  the  new  building,  and  that  the 
offices  of  the  Chief  Grain  Inspector  and  of  the  Registrar  would  be 
154  Washington  street  in  the  City  National  Bank  Building.  It  was 
on  October  9,  the  anniversary  of  the  fire,  that  the  Board  of  Trade 
moved  to  its  magnificent  new  home.  At  noon  of  that  day  the 
Board  of  Trade  and  invited  guests  moved  in  procession  from  the  old 
hall  to  the  new.  Among  the  distinguished  guests  were  Mayor 
Medill,  Judges  Drummond,  Blodgett,  Williams,  Booth,  Farwell, 
Rogers,  Tree,  Jameson,  Gary,  Porter  and  Wallace ;  General  John  A. 
Logan,  C.  B.  Farwell,  ex-Mayer  J.  B.  Rice,  General  Sheridan  and 
his  staflf,  W.  F.  Coolbaugh,  Rev.  R.  W.  Patterson,  D.  A.  Jones, 
president  of  the  Chamber  of  Commerce,  George  C.  Walker,,  Vice 
President  J.  L.  Hancock,  C.  B.  Pope,  Artemas  Carter,  E.  G.  Hall, 
D.  M.  Pearsons,  O.  K.  Hutchinson,  F.  L.  Parker,  J.  W.  Towne  and 
J.  F.  Brooks,  Director  of  the  Chamber  of  Commerce,  and  C.  S.  Reyn- 
olds, the  Secretary.  Ex-President  S.  H.  McCrea  and  nearly  all  of  the 
present  officers  of  the  Board  of  Trade  were  also  present.  At  the  new 
hall  the  band  played  "Home  Again,"  and  the  Glee  Club,  consisting  of 
W.  W.  Boynton,  W.  Gooding,  A.  E.  Clark,  C.  C.  Phillips,  D.  S. 
Kimbark,  W.  J.  Coulson,  M.  Jones  and  Mr.  Sprague,  sang  "Auld 
Lang  Syne."  Daniel  A.  Jones,  President  of  the  Chamber  of  Com- 
merce, was  the  first  speaker,  and  he  was  responded  to  by  C.  E.  Cul- 
ver, First  Vice   President  of  the  Board   of  Trade,   who   took  the 


462  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

place  of  President  Preston,  who  was  confined  to  his  home  by  ill- 
ness, and  was  thus  unable  to  be  present  at  this  culmination  of  his 
work  as  President  of  the  Board  of  Trade..  A  prayer  was  offered 
by  Rev.  R.  W.  Patterson  and  a  message  of  congratulation  from 
Bufifalo  was  read  by  Secretary  Randolph.  Addresses  were  deliv- 
ered by  Hon.  W.  F.  Coolbaugh  and  Hon.  Joseph  Medill,  and  it  was 
related  that  immediately  after  the  fire  the  Cook  County  National 
Bank  placed  $2,000  to  the  credit  of  C.  L.  Raymond,  Secretary  and 
Treasurer  of  the  Chamber  of  Commerce,  for  the  purpose  of  clearing 
the  still  smoking  ruins.  In  concluding  his  address,  turning  the  new 
hall  over  to  the  Board  of  Trade,  President  Jones  of  the  Chamber  of 
Commerce  said :  "And  now  in  fulfillment  of  our  promise  made  to 
you  last  October,  nearly  one  year  ago, — that  at  this  time  we  would 
have  completed  for  your  Board  of  Trade  a  finer  building  and  a 
more  beautiful  hall  than  the  old  one,  and  while,  owing  to  the  advance 
in  the  price  of  material  and  labor,  which  has  raised  the  cost  above 
that  contemplated  at  the  commencement,  we  have  spared  no  pains 
or  expense  to  make  it  a  model  commercial  building — I,  therefore, 
now  give  you  formal  possession  of  this  beautiful  hall,  and  in  so 
doing  permit  me  to  say  that  I  hope  that  no  act  of  the  members  of 
the  Board  of  Trade  will  have  a  tendency  to  clog  the  great  wheels 
of  commerce  which  are  continually  rolling  in  this  city,  but  that 
every  facility  will  be  given  to  accelerate  the  trade  that  naturally 
seeks  this  market."  Mr.  C.  E.  Culver  in  response  spoke  of  the 
early  history  of  the  Board  and  its  business  relations  with  the  Cham- 
ber of  Commerce,  and  said  in  part  as  follows: 

"Then  came  that  terrible  calamity,  and  in  one-half  hour  was 
swept  away,  by  a  flame  of  fire,  income  and  home,  and  with  them 
was  destroyed  the  entire  business  portion  of  our  city.  Of  that  home 
the  poet  writes — 

"  'Men  clasped  each  other's  hands  and  said. 
The  city  of  the  West  is  dead.' 

"There  were  some  even  of  our  own  number  who  doubted  if 
you  could  build,  or  we  could  occupy,  so  costly  a  building  again. 
Hearing  such  doubt  expressed,  your  directors  at  once  sought  to 
know  if  the  Board  of  Trade  desired  the  building  replaced.  As  soon 
as  the  vaults  containing  the  leases  and  agreements  could  be  opened, 
a  meeting  of  the  Board  of  Directors  of  the  Board  of  Trade  was  held. 
The  agreement  was  read,  and  the  following  resolution  was  adopted : 

"Resolved,  That  this  Board  of  Directors  hereby  notify  the 
Chamber  of  Commerce  corporation  that  this  Board  will  comply 
with  the  provisions  of  the  lease  held  from  them ;  and  in  conformity 
with  that  lease  the  Board  of  Trade  hereby  requires  that  the  Cham- 
ber of  Commerce  reconstruct,  at  once,  their  building  in  as  good 
shape  as  it  was  originally,  as  it  is  the  wish  of  the  Board  to  occupy 
the  building  at  the  earlist  possible  day. 

"But,  sir,  your  corporation  needed  only  to  know  that  the  Board 


[1872]  OF  THE  CITY  OF  CHICAGO  463 

of  Trade  would  willingly  carry  out  the  conditions  of  the  lease ;  and 
no  sooner  were  you  informed  of  their  action  than  you  commenced 
the  work,  thus  speedily  brought  to  a  successful  termination.  In  my 
opinion,  no  one  thing  did  more  to  remove  doubt  as  to  the  recon- 
struction of  Chicago  than  the  announcement  made  on  the  very 
week  of  the  fire  that  men  were  at  work  on  the  new  Chamber  of 
Commerce  building. 

"Inspired  by  your  example,  and  stimulated  by  your  enterprise, 
others  promptly  followed,  doubts  were  dissipated,  the  future  was 
guaranteed.  And  now  we  behold  the  result !  On  every  hand  edi- 
fices more  magnificent  and  more  substantial  than  before.  Having 
full  confidence  in  the  ability  and  determination  of  the  directors  of  the 
Chamber  of  Commerce,  we  expected  marvelous  things  from  you, 
but  you  have  more  than  met  our  expectations.  You  present  us,  on 
this,  the  first  anniversary  day  of  the  fire,  a  building  far  exceeding 
in  beauty  and  solidity  the  one  lost  in  the  great  conflagration  of  a 
year  ago.  To  the  President  and  Directors  of  the  Board  of  Trade 
it  is  a  source  of  great  regret  that  circumstances  are  such  that  guests 
from  abroad  could  not  be  invited  to  unite  with  us  on  this  day,  and 
witness  for  themselves  what  has  been  done  in  our  city  since  that 
memorable  day  that  we  were  the  recipients  of  the  world's  great 
munificence. 

"Sir,  you  have  expressed  the  hope  that  while  we  are  privileged 
to  occupy  these  premises,  none  of  our  members  will  attempt  to 
block  the  wheels  of  commerce.  In  this,  let  me  assure  you,  your 
hopes  are  not  more  ardent  than  are  those  of  the  President  and  other 
officers  of  our  association.  I  know  I  but  express  their  views  in  say- 
ing that  they  regard  as  disgraceful  and  dishonorable  any  attempt 
to  promote  one's  own  personal  profit  at  the  expense  of  the  just 
rights  of  others. 

"And,  sir,  I  appeal  to  you  and  to  all  others  who  have  the  inter- 
ests of  our  city  at  heart  to  assist  in  inculcating  just  and  equitable 
principles  in  trade,  to  establish  which  was  one  of  the  objects  of  the 
formation  of  our  association. 

"The  recent  action  of  the  Board  in  providing  unusual  storage 
room  for  grain,  and  their  still  more  recent  adoption  of  new  rules 
for  margins  on  contracts,  is  evidence  of  its  favoring  unrestricted 
trade,  and  condemning  all  interference  with  the  commerce  of  the 
city.  You  have  appropriately  referred  to  those  who  have  per- 
formed the  labor,  made  and  executed  the  plans  of  this  structure,  a 
structure  which  for  the  use  intended  is  not  surpassed  in  size,  beauty 
and  convenience  by  any  on  this  or  on  the  eastern  continent ;  your 
words  and  their  works  do  praise  them. 

"And  now,  sir,  in  behalf  of  the  Board  of  Trade  of  the  city  of 
Chicago,  I  do  hereby  accept  as  fulfilled  the  requirements  of  its 
directors,  as  contained  in  their  resolutions  of  October  13,  1871, 
and  in  receiving  possession  of  these  rooms  I,  in  the  same  behalf, 
return  thanks  not  only  to  the  host  of  men  employed  in  the  con- 
struction and  completion  of  this  building,  but  especially  to  you, 
their  chief,  and  your  untiring  and  enterprising  assistant  and  secre- 
tary, Charles  L.  Raymond.     In  this  we  are  not  unmindful  of  that 


464  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

Providence  under  whose  kind  care  and  good  hand  your  work  has 
been  accomplished  without  the  loss  of  life  or  limb." 

The  building  committee  of  the  Chamber  of  Commerce  con- 
sisted of  John  L.  Hancock,  George  C.  Walker,  and  Daniel  A.  Jones, 
and  J.  C  Cochrane  was  the  architect.  The  Board  of  Trade  had  been 
established  in  its  new  home  but  a  few  days  when  it  had  for  its  guest 
no  less  a  personage  than  Hon.  James  G.  Blaine,  who  was  introduced 
to  the  members  by  Vice  President  Culver. 

Perhaps  at  no  other  time  have  the  wheels  of  commerce  been 
stopped  by  such  a  cause  as  they  were  in  October,  1872,  and,  as- 
suredly, with  the  advent  of  the  automobile  and  electricity,  they 
will  never  be  blocked  for  the  same  cause  again.  In  the  latter 
part  of  October  it  was  announced  that  there  was  a  threatened 
embargo  on  the  movement  of  grain  along  the  Erie  Canal  in  con- 
sequence of  the  prevalence  of  the  "horse  disease,"  and  it  was  re- 
ported that  hundreds  of  horses  were  dying  daily.  The  following 
day  it  was  announced  that  the  canal  business  was  almost  sus- 
pended, and  by  the  31st  the  epidemic  had  spread  to  such  an 
extent  that  it  affected  the  markets,  and  prices  of  all  kinds  of 
produce  went  down.  The  distemper  spread  rapidly,  the  whole- 
sale business  of  Boston  was  practically  suspended,  and  New  York 
suffered  severely.  In  many  cities  ox  teams  replaced  horses  as 
draught  animals.  By  the  first  of  November  the  disease  had  spread 
to  Chicago,  street  car  traffic  was  stopped,  as  were  the  omnibuses, 
and  little  coal  could  be  delivered.  AH  towing  teams  were  taken 
off  the  Illinois  and  Michigan  Canal,  and  ox  teams,  man  power 
and  dummy  engines  were  employed  for  transportation.  The  tie-up 
did  not  last  a  great  length  of  time,  but  while  it  did  the  business  of 
the  country  was  almost  completely  paralyzed. 

The  meeting  of  the  National  Board  of  Trade  was  held  at  New 
York,  October  15,  and  the  Chicago  delegates  were  A.  M.  Wright, 
afterwards  chosen  as  one  of  the  Vice  Presidents  of  the  National 
body,  George  M.  How,  S.  H.  McCrea,  Asa  Dow,  A.  Murison  and 
N.  K.  Fairbank.  The  "Tribune"  of  October  18  gave  the  following 
report  of  a  portion  of  the  proceedings :  "In  the  National  Board  of 
Trade  yesterday,  Mr.  Hazard  of  Buffalo  claimed  that  it  was  asking 
too  much  to  expect  the  State  of  New  York  to  give  up  the  revenues 
of  the  Erie  Canal  for  the  sake  of  a  national  appropriation  to  enlarge 
it,  because  other  States  would  be  more  benefited  by  the  work  than 
New  York.  A  committee  made  a  report  denouncing  generally  all 
the  gambling  practices  in  trade,  on  which  the  minority  reported  a 
substitute  denouncing  gambling  and  cornering  in  grain,  stocks, 
gold,  etc.,  as  dishonest.  In  the  discussion  it  was  stated  that  exten- 
sive gambling  is  done  in  cotton,  the  daily  nominal  sales  sometimes 
exceeding  the  whole  stock  of  cotton  in  the  country.  The  majority 
report  was  adopted.    The  committee  on  relations  with  Canada  re- 


CO 


J 


[1872]  OF  THE  CITY  OF  CHICAGO  465 

ported  in  favor  of  memorializing  Congress  to  authorize  a  commis- 
sion to  prepare  a  treaty  for  reciprocal  trade  with  Canada  on  a  liberal 
basis,  the  scheme  to  involve  the  enlargement  of  the  Canadian 
canals  by  the  Dominion  government  and  their  free  navigation  by 
American  vessels.     No  action  was  taken  on  the  report." 

By  November  the  corner  in  pork  had  developed  to  such  an 
extent  as  to  have  a  demoralizing  eflfect  upon  the  market.  This 
corner  was  engineered  by  Wm.  Young  &  Co.,  who  began  buying 
options  in  the  early  part  of  the  year  for  August  delivery.  As  has 
been  stated,  the  shorts  bought  from  other  cities  and  it  was  said 
that  60,000  barrels  of  mess  pork  were  delivered  to  Young  &  Co.  at 
a  cost  of  some  $750,000,  the  firm  taking  and  paying  for  all  that  was 
offered.  Shipments  were  stopped,  and  the  trade  was  demoralized. 
There  being  nearly  100,000  barrels  in  stock  in  Chicago,  packing 
operations  were  checked.  This  corner  was  more  successful  than 
the  others  attempted  during  the  year,  the  trade  being  carried  from 
month  to  month,  and  the  promoters  are  said  to  have  netted  a  profit. 

Early  in  November,  the  city  of  Boston  was  fire  swept,  and, 
having  its  own  recent  calamity  and  the  generous  outpouring  of 
relief  fresh  in  mind,  the  people  of  Chicago  were  anxious  to  show 
their  sympathy  with  the  distressed  people  of  Boston.  On  the  even- 
ing of  November  11a  mass  meeting  was  held  at  the  Chamber  of 
Commerce  for  the  purpose  of  soliciting  aid  for  Boston ;  J.  W.  Pres- 
ton, President  of  the  Board  of  Trade,  called  the  meeting  to  order, 
and  Mr.  Wirt  Dexter  made  an  impassioned  speech  telling  of  Bos- 
ton's generosity  to  Chicago,  and  that  the  people  of  that  city  had 
immediately  telegraphed  their  offers  of  help  and  had  sent  a  commit- 
tee personally  bringing  their  contribution  in  cash.  At  this  meeting 
$49,195  were  raised  and  plans  were  made  for  extensive  solicitation 
throughout  the  city.  The  soliciting  committee  for  the  Board  of 
Trade  consisted  of  B.  F.  Murphy,  J.  W.  Odell  and  Howard  Priestley. 

The  month  of  November,  1872,  witnessed  the  passing  of  the 
"Evening  Board"  which  had  been  established  in  October,  largely 
at  the  demand  of  provision  dealers.  There  was  a  general  desire  to 
shorten  the  hours  of  trading  rather  than  to  increase  them,  and  on 
November  13  a  committee  was  appointed  by  the  Chicago  Board  of 
Trade  to  meet  with  a  similar  committee  from  Milwaukee,  to  consider 
concerted  action  to  limit  the  hours  of  trade.  Later  in  the  month 
a  committee  of  the  Board  of  Trade  made  a  report  to  the  railroad 
and  warehouse  commission  on  the  evils  of  underbilling  and  stated 
that  there  were  extensive  frauds  in  short  weights.  It  was  in  line 
with  this  that  Flint  &  Thompson  asked  that  a  committee  of  the 
Board  of  Trade  be  appointed  to  watch  the  weighing  at  the  Rock 
Island  elevator,  of  which  they  were  proprietors.  This  request  was 
complied  with,  and  I.  N.  Stiles,  W.  N.  Brainard  and  J.  R.  Bensley 
were  appointed.  Another  reform  movement  was  in  the  rule  pro- 
posed by  Alex  Murison,  providing  that  margins  might  be  deposited 


-^ 


y  466  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 


^ 


in  any  national  bank  complying  with  the  regulations  of  the  Board 
of  Trade.  The  argument  in  favor  of  this  was  that  having  a  single 
place  of  deposit  gave  too  much  power  to  one  bank,  and  it  was 
rumored  that  officials  of  the  depository  bank  were  at  that  time  en- 
gaged in  an  attempt  to  control  the  wheat  market.  /This  amendment 
was  adopted  December  23.  In  the  meantime  the  scandal  relative 
the  Munn  &  Scott  elevator  had  been  quieted,  but  it  broke  out  afresh 
in  November  when  George  Armour  &  Co.  announced  that  they 
would  furnish  the  registrar  with  a  statement  of  all  grain  in  the 
Munn  &  Scott  elevators,  they  at  the  time  cautioning  against  Munn 
&  Scott  receipts  unless  endorsed  by  George  Armour  &  Co.  It  was 
reported  that  George  Armour  &  Co.  had  bought  about  40,000  bushels 
of  wheat  and  475,000  bushels  of  corn  in  order  to  honor  Munn  & 
Scott's  receipts.  There  were  fresh  demands  for  another  invoice  of 
grain  in  storage,  which  was  strengthened  when  it  was  found  that 
there  was  a  discrepancy  of  116,262  bushels  of  wheat  in  the  North- 
western elevator.  It  was  this  which  brought  about  the  exposure 
of  the  fraud  perpetrated  by  Munn  &  Scott  at  the  time  of  the  meas- 
urement of  grain  in  store  in  August.  The  "Tribune"  of  November 
20  gives  the  facts  concerning  this  affair:  "When  the  proposition 
was  made  in  August  to  measure  up  the  grain  in  the  different  ele- 
vators, Munn  &  Scott  signified  their  willingness  to  have  their 
houses  submitted  to  examination,  but  stated  they  would  prefer 
that  some  other  houses  should  be  measured  first.  This  desire  was 
so  reasonable  that  it  was  at  once  deferred  to,  especially  as  Munn  & 
Scott  are  understood  to  have  urged  that  to  take  their  measurement 
first  might  be  construed  into  proofs  that  they  were  the  parties 
especially  aimed  at  in  the  movement.  The  time  occupied  in  meas- 
uring up  the  others  seems  to  have  been  improved  (?)  to  put  in 
false  bottoms,  which  were  so  near  the  top  that  the  real  bottom  soon 
fell  out  of  their  scheme."  The  "Tribune"  stated  further  that  the 
measurements  had  been  taken  by  an  inspector  who  had  been  dis- 
charged by  Chief  Grain  Inspector  McChesney,  but  later  reinstated 
at  the  request  of  Munn  &  Scott  and  other  elevator  men.-  The  rev- 
elations were  harmless  on  account  of  the  action  of  George  Armour 
&  Co.,  but  the  exposure  resulted  in  offers  by  the  elevator  men  to 
measure  the  grain  then  in  store.  The  affairs  of  the  Munn  &  Scott 
I  elevator  came  before  the  Register  in  Bankruptcy  and  the  testimony 
of  Ira  Y.  Munn  caused  a  great  sensation.  The  headlines  of  the 
"Tribune"  read:  "Ira  Y.  Munn  on  Stand  Lays  Bare  Elevator  Com- 
bination— Profits  Divided— Agreement  in  1866 — Included  North- 
;-.^  ;  western  Elevators,  West  Side  Elevators,  Galena  and  Wheeler  & 
\  !  Munger— A  General  Pool — History  of  Contracts  with  Northwestern 
!  Railway  Beginning  in  1862  and  renewed  in  1866."  These  head- 
\  lines  told  the  story  in  brief,  but  the  court  proceedings  developed 
'  the  full  details  of  the  elevator  combine,  which  was  said  to  have 
,     included  all  except  the  Buckingham,  Flint  &  Thompson,  and  Vin- 


[1872]  OF  THE  CITY  OF  CHICAGO  467 

cent  Nelson  &  Co.  warehouses.  The  Directors  of  the  Board  of 
Trade  had  already  been  investigating  the  Munn  &  Scott  elevator, 
and  on  November  29  Secretary  Randolph  read  a  report  recom- 
mending the  expulsion  of  Ira  Y.  Munn  and  G.  L.  Scott,  on  the 
complaint  of  H.  C.  Ranney  and  others,  and  on  December  3  they  were 
formally  expelled  from  the  Board  of  Trade.  One  good  effect  of  all 
this  agitation  was  that  the  Hough  elevator  decided  to  take  a  license 
under  the  State  law,  being  the  first  of  the  Chicago  elevators  to  do 
this,  but,  that  all  trickery  had  not  ceased  is  evidenced  by  the  fact 
that  W.  F.  Tompkins,  Chief  Inspector,  notified  the  commission  that 
large  quantities  of  No.  3  barley  had  been  taken  from  the  Armour, 
Dole  &  Co.  elevator,  switched  to  the  Galena  track,  again  inspected, 
and  graded  as  No.  2,  showing  a  profit  of  8  cents  per  bushel.  An 
investigation  of  these  charges  was  asked. 

Speaking  of  this  eventful  year  in  the  history  of  Chicago  and 
the  Board  of  Trade,  Secretary  Randolph  in  his  report  dated  January 
1,  1873,  said  in  part  as  follows: 

The  year  just  closed  has,  in  many  respects,  been  the  most 
remarkable  one  in  our  history.  Its  opening  found  our  principal 
business  streets  laid  waste  by  the  great  fire  of  the  previous  autumn, 
and  the  business  of  the  city  was  mostly  being  transacted  at  great 
disadvantage,  and  in  quarters  illy  adapted  to  the  uses  into  which 
they  had  been  improvised.  A  hopeful  feeling  had,  however,  come 
to  be  indulged  by  our  people,  and  full  confidence  was  felt  that  at 
an  early  day  we  should  recover  from  the  immense  losses,  and  the 
derangement  of  business  incident  to  the  terrible  ordeal  through 
which  we  had  been  called  to  pass.  Sanguine  as  most  of  our  citizens 
felt  in  regard  to  the  future,  but  few  dared  predict  for  a  year  or  more 
a  full  return  of  the  unparalleled  prosperity  our  city  had  enjoyed 
in  the  years  recently  past.  No  little  apprehension  was  felt  that  in 
addition  to  other  untoward  circumstances,  the  total  loss  of  all  public 
records  touching  the  land  titles  of  the  city  might  result  in  great 
embarrassment  in  securing  such  loans  as  might  be  necessary  in 
prosecuting  the  work  of  rebuilding  the  burned  district;  and  while 
we  may  not  be  able  to  see  exactly  how  such  matters  have  in  many 
cases  been  arranged  to  the  satisfaction  of  loaners,  little  difficulty 
has  been  realized  in  this  respect,  and  all  contemplated  improve- 
ments in  the  way  of  building  have  gone  forward  with  uninterrupted 
and  most  vigorous  prosecution.  Another  difficulty  was  anticipated 
by  many  in  the  line  of  labor  exactions  and  the  possible  complica- 
tions resulting  therefrom ;  but — thanks  to  the  enormous  influx  of 
mechanics  and  laborers — no  serious  embarrassments  of  this  nature 
have  occurred.  Labor  has  been  in  abundant  supply  and  usually 
well  rewarded,  and  there  has  been  little  disposition  shown  to  demand 
for  it  extortionate  rates.  The  late  winter  and  early  spring  found 
many  thousands  of  laborers  and  mechanics  actively  employed  upon 
structures  that  were  to  replace  those  destroyed ;  and  with  wonder- 
ful rapidity,  one  after  another,  palatial  business  blocks  were  ready 
for  and  eagerly  seized  by  the  waiting  tenants ;   so  that   by  mid- 


468  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

summer  hundreds  of  elegant  stores  were  fully  stocked  and  their 
occupants  pushing  a  thriving  and  increasing  business.  At  the 
expiration  of  one  year  from  the  date  of  the  fire  business  structures 
nearly  equal  in  extent  of  accommodation  to  all  that  were  destroyed 
in  the  central  portion  of  the  city  were  in  more  or  less  forward 
condition  towards  completion,  and  at  the  closing  in  of  winter  much 
more  than  half  of  these  were  occupied.  The  prediction  suggested 
in  my  last  report  in  regard  to  an  early  restoration  of  the  business 
portion  of  the  city  has  been  much  more  than  realized,  and  today 
it  is  safe  to  say  we  have  (considering  their  character  and  fitness  for 
the  uses  contemplated)  completed  and  in  course  of  completion  more 
store  and  office  capacity  than  we  had  previous  to  the  fire,  while  in 
hotel  capacity  the  new  very  considerably  exceeds  that  of  the  ante- 
fire  days.  Building  enterprises  have  not  been  confined  to  the  burned 
district,  but  many  fine  and  substantial  erections  have  been  made 
on  the  "West  Side"  and  on  the  "South  Side"  beyond  the  limits  of 
the  fire.  The  character  of  the  buildings  erected  have,  with  a  very 
few  exceptions,  been  greatly  superior  to  those  destroyed ;  in  fact, 
it  is  a  common  remark  by  persons  of  experience  visiting  the  city, 
that  we  are  promised  a  city  superior  to  any  in  this  country,  in  point 
of  beauty  of  design  and  finish  and  solidity  of  construction.  The 
amount  of  money  already  expended,  and  to  be  expended  on  contracts 
now  in  course  of  execution,  is  scarcely  less  than  $45,000,000;  and 
the  contemplated  improvements  for  1873  will  probably  reach  one- 
third  to  one-half  as  much  more.  The  building  of  residences,  except 
of  small  dimensions  and  cost,  has  not  been  pressed  with  the  same 
vigor  as  business  structures,  but  much  more  is  expected  to  be  accom- 
plished during  the  present  year. 

The  development  of  business  has  been  no  less  remarkable  than 
has  the  wonderful  restoration  of  the  facilities  for  transacting  it. 
The  unparalleled  degree  of  sympathy  manifested  in  Chicago's  sad 
fate  in  October,  1871,  has  seemed  to  continue  to  the  extent  of 
patronizing  our  merchants  from  new  quarters,  and  to  an  extent 
greater  than  hitherto.  The  general  trade  of  the  year  has  been 
good,  and  where  prosecuted  with  prudence  and  forecast  has  been 
reasonably  profitable.  Comparatively  few  of  our  prominent  mer- 
chants have  discontinued  or  materially  changed  their  business 
arrangements,  and  probably  no  year  in  our  history  has  witnessed 
the  appearance  of  so  many  new  firms  with  substantial  means  and 
ability.  Our  growth  in  population  has  been  very  marked.  A  can- 
vass of  the  city  in  June,  1871,  developed  a  resident  population  of 
334,270;  the  depletion  consequent  upon  the  fire  probably  reduced 
our  number  to  310,000  or  315,000,  but  growth  again  set  in  before 
the  close  of  1871,  and  has  continued  steadily  since.  In  October  the 
city  authorities  took  a  somewhat  imperfect  accounting  of  the  people, 
the  result  showing  a  population  of  367,396.  At  the  close  of  the  year 
it  should  probably  be  stated  at  not  less  than  380,000. 

Large  as  was  the  business  of  1871  in  agricultural  productions, 
exceeding  that  of  any  previous  year,  that  grand  aggregate  is  greatly 
exceeded  by  the  year  just  closed.  The  same  is  true  of  lumber  and 
of  other  branches  of  trade. 


[1872]  OF  THE  CITY  OF  CHICAGO  469 

The  year  has  probably,  as  a  whole,  witnessed  more  irregularity 
and  excitement  in  the  grain  trade  than  any  of  its  predecessors.  The 
trading  (largely  on  speculation)  has  been  enormous,  and  the  tend- 
ency for  speculation  has  indeed  been  rampant.  Various  theories 
are  advanced  as  accounting  for  this  growing  mania,  the  more 
plausible  one  perhaps,  being  that  owing  to  large  losses  by  our  fire 
and  other  sweeping  misfortunes  here  and  elsewhere,  men  have  been 
anxious  to  hazard  on  operations  apparently  promising  speedy  and 
fortunate  results;  but  this  cannot  account  for  all  the  increase  in 
this  class  of  business.  It  is  well  known  by  those  familiar  with  the 
business  that  much  the  larger  portion  of  it  is  transacted  by  order 
and  on  account  of  parties  not  residents  of  this  city.  The  disposition 
to  operate  in  grain  is  widespread,  and  our  commission  merchants 
are  constantly  in  receipt  of  orders  for  speculative  operations ;  and 
from  all  directions  the  vibrations  of  values  here  are  carefully  noted, 
involving  gain  or  loss  to  thousands,  many  of  whom  do  not  hesitate, 
in  bland  but  deprecating  terms,  to  speak  of  the  business  as  a  species 
of  gambling  deserving  at  least  mild  censure  from  well-disposed 
persons.  It  may  be  safely  assumed  that  operations  in  grain  during 
the  past  year  have  not  generally  been  of  a  profitable  nature.  No 
previous  year  has  witnessed  bolder  attempts  at  manipulating  prices 
than  the  past,  although  since  August  but  little  of  this  disposition 
has  been  perceptible.  Attempts  were  made  during  the  earlier  por- 
tions of  the  year  to  control  the  prices  of  wheat,  oats  and  pork,  on 
a  scale  and  to  an  extent  not  hitherto  ventured  upon.  Nearly  all 
these  operations  are  supposed  to  have  resulted  disastrously  to  a 
greater  or  less  extent,  some  producing  widespread  derangement  and 
financial  embarrassment.  It  is  hoped  the  experience  of  the  past 
may  effectually  deter  like  operations  on  the  future,  but  in  any  case 
it  is  believed  the  entire  security  afforded  to  operators  by  recent 
amendments  to  the  Rules  of  the  Board  of  Trade  touching  the  matter 
of  ample  margins  will,  if  parties  choose  to  avail  themselves  of  their 
provisions,  fully  protect  both  parties  to  trades  against  any  loss  by 
reason  of  the  inability  of  either  to  ultimately  meet  his  engagements. 

Flour 

The  trade  in  flour  has  ruled  very  quiet  during  the  year,  in  fact, 
there  being  but  little  disposition  to  speculate  in  it,  no  excitements, 
such  as  at  times  attach  to  grain  and  provisions,  are  observable  in 
the  market.  The  demand,  while  steady,  has  not  generally  been 
urgent.  Winter  wheat  flours  have  been  rather  scarce,  and  have 
ruled  higher,  as  compared  with  spring  wheat  grades,  than  in  most 
years.  The  local  milling  capacity  was  largely  reduced  by  the  fire 
of  last  year,  and  no  part  of  it  has  been  restored,  nor  is  it  likely  to 
be  unless  better  arrangements  can  be  affected  in  regard  to  the 
handling  of  wheat  for  manufacturing  purposes.  There  are  now  but 
two  mills  in  the  city  of  large  capacity.  Of  these,  the  "Star  and 
Crescent"  reports  have  manufactured  in  1872  119,100  barrels,  and 
the  "Oriental"  (in  operation  only  some  three-fourths  of  the  year) 
68,868  barrels ;  the  entire  manufacture  of  the  city  being  greatly  less 
than  the  city's  consumption.    The  receipts  have  been  1,532,014  bar- 


470  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

rels,  and  the  shipments  1,361,328  barrels.    At  the  close  of  the  year 
the  stocks  throughout  the  country  are  unusually  light. 

Wheat 

The  receipts  of  wheat  have  been  12,724,141  bushels,  against 
14,439,656  bushels  in  1871 ;  the  falling  oflf  being  entirely  in  the  first 
half  of  the  year,  the  result  proving  that  a  larger  per  cent  of  the  crop 
of  1871  was  marketed  before  winter  than  has  been  usual.  The  first 
seven  months  of  the  year,  as  has  been  intimated,  was  marked  by 
a  very  speculative  condition  of  markets,  and  prices  were  held  at  a 
point  that  prevented  free  shipments  hence,  and  we  carried  a  heavy 
stock  during  the  spring  and  early  summer.  Since  August  the  move- 
ment has  been  more  natural  and  regular.  The  crops  harvested  in 
both  the  last  two  years  have  been  good  in  quality  and  condition, 
but  in  both  instances  appear  to  have  fallen  below  general  estimates 
as  to  quantity.  The  culture  of  wheat  in  Illinois  is  not  increasing 
relatively  with  the  growth  of  population ;  in  fact  the  production  of 
this  grain  seems  most  profitable  in  the  more  newly-developed  ter- 
ritory of  the  country,  and  the  wheat  belt  travels  westward  on  an 
even  pace  with  civilization. 

Corn 

Although,  Illinois  may  have  declined  relatively  in  the  produc- 
tion of  wheat,  it  certainly  has  not  in  that  of  corn.  The  last  three 
crops  harvested  have  been  in  quantity  most  abundant,  and  in  quality 
most  excellent.  The  vast  amount  of  this  grain  known  to  be  at  hand 
has  efifectually  precluded  any  disposition  to  manipulate  prices  of 
it,  and  the  trade  in  it  has  been  characterized  by  a  steady  legitimate 
shipping  demand.  Prices  have  ruled  lower  than  for  several  years 
past,  and  it  is  hardly  probable  the  net  results  to  the  producer  have 
been  very  satisfactory.  The  receipts  have  been  47,366,087  bushels, 
against  41,853,138  bushels  in  1871,  which  was  over  8,000,000  bushels 
in  excess  of  any  previous  year.  The  low  price  of  corn  has  induced 
a  fair  foreign  demand  for  it,  and  exports  to  Europe  have  been  steady 
and  large. 

Oats 

The  grain  suffered  the  application  of  a  stupendous  attempt  at 
"cornering"  in  June,  when  some  supposed  that  the  amount  at  that 
time  remaining  in  the  interior  was  so  insignificant  that  prices  both 
here  and  at  consuming  points  could  be  controlled  almost  at  will ; 
and  apparently  with  that  view  the  manipulators  ofifered  to  "take 
what  there  was  of  them"  at  41  cents  per  bushel.  Deliveries  were 
stimulated  by  the  proposition  and  consumption  diminished,  corn  at 
that  time  ruling  only  about  three  cents  per  bushel  of  56  pounds 
above  the  price  for  32  pounds  of  oats.  There  proved  to  be  vastly 
more  oats  ready  for  market  than  had  been  anticipated,  and  the 
result  was  a  more  disastrous  failure  of  the  "corner"  and  a  sudden 
decline  in  price  before  the  end  of  June  to  27  cents.  Earlier  and 
later  in  the  year  the  market  ruled  steady  and  generally  on  a  fair 
shipping  basis.  Since  harvest  the  range  of  prices  has  been  very 
low,  sympathizing  more  or  less  with  the  downward  tendency  in 
corn.     The  crop  of   1872  was  somewhat  below  the  usual   quality. 


[1872]  OF  THE  CITY  OF  CHICAGO  471 

a  large  portion  of  it  being  tainted  with  a  slightly  musty  aroma.  The 
receipts  have  been  15,061,715  bushels.  In  1871  they  were  14,789,414 
bushels. 

Rye 

The  receipts  of  rye  have  been  1,129,086  bushels.  In  1871  they 
were  2,011,788  bushels.  Prices  have  been  remarkably  steady 
throughout  the  year,  the  demand  being  almost  wholly  for  imme- 
diate consumption. 

Barley 

The  trade  in  barley  has  been  quite  large,  and  less  subject  to 
fluctuations  of  price  than  in  most  of  the  recent  years.  The  quality 
of  the  last  crop  was  about  as  the  previous  one.  The  city  consump- 
tion is  less  than  before  the  fire,  as  most  of  our  malting  establish- 
ments were  destroyed,  and  it  is  only  quite  recently  the  recon- 
structed have  been  prepared  to  renew  operations.  The  city  con- 
sumption, however,  must  be  larger  than  is  indicated  by  the  balance- 
sheet  of  the  grain  movement.  The  discrepancy  can  be  accounted 
for  by  the  fact  that  large  amounts  are  received  in  sacks,  some  of 
which  undoubtedly  escapes  being  reported  fully.  Receipts  have 
been  5,251,750  bushels,  against  4,069,410  in  1871. 

Live   Stock 

The  largely-increased  production  of  corn  for  the  past  three 
years  has  greatly  accelerated  stock  raising,  and  our  receipts  of  both 
cattle  and  hogs  have  been  largely  in  excess  of  any  former  year. 
Indeed,  the  low  price  of  corn  at  the  seaboard,  and  the  high  rates 
of  transportation  thither,  have  left  no  alternative  for  the  remote 
producer  but  the  conversion  of  this  crop  into  beef  and  pork.  The 
current  movement  of  hogs  during  the  summer  months  was  so  large 
as  to  attract  marked  attention,  and  it  seeemed  a  marvel  where  or 
how  such  vast  quantities  could  be  disposed  of  for  immediate  con- 
sumption, as  they  must  be  during  the  warmer  seasons.  Prices  of 
cattle  have,  as  a  general  rule,  been  satisfactory,  that  of  hogs  at  least 
as  much  so  as  the  quantity  at  market  could  be  hoped  to  justify. 
Receipts  of  cattle  have  been  684,075,  and  of  hogs  (live  and  dressed) 
3,488,528.  In  1871  they  were  of  cattle  543,050  and  of  hogs  2,652,549. 
The  total  value  of  live  stock  received  at  the  stock  yards  in  1872  is 
estimated  as  follows :  Cattle,  $41,000,000;  hogs,  $33,500,000;  sheep, 
$950,000 ;  horses,  $250,000;  grand  total  of  $75,475,000. 

Provisions 

The  packing  of  pork  in  the  city  during  the  season  of  1871-2 
amounted  to  1,225,236  hogs,  an  unusually  large  portion  of  which 
was  cut  into  meats  for  dry  salting.  The  demand  for  this  class  of 
meats  has  been  large  during  the  year,  immense  quantities  being 
taken  for  export  to  Europe,  while  the  home  demand,  eastern  and 
southern,  has  been  well  maintained.  In  mess  pork  the  trade  dur- 
ing the  early  part  of  the  year  was  largely  speculative.  Since  August 
comparatively  little  has  been  done  in  that  direction.  In  this  article 
a  successful  attempt  was  made  at  "cornering"  during  the  summer, 


472  HISTORY  OF  THE  BOARD  OF  TRADE  [1872] 

the  parties  in  interest  being  understood  to  be  wholly  non-residents. 
The  rates  to  which  prices  were  forced  brought  to  this  market  con- 
siderable quantities  of  pork  from  points  not  naturally  tributary  to 
us,  so  that  at  one  time  we  held  the  principal  portion  of  the  stock 
in  the  West.  This  the  "corner"  took  and  subsequently  disposed 
of  as  best  they  could.  Whether  so  designed  we  may  not  know,  but 
the  effect  of  this  operation  was  to  greatly  check  speculation  in  the 
article,  and  the  market  has  since  been  left  to  its  natural  course. 

The  packing  thus  far  in  this  season  is  somewhat  below  that  of 
the  last  at  a  corresponding  date ;  many  anticipate  a  final  result  as 
large,  but  it  may  prove  that  the  heavy  drain  on  the  hog  crop  by  sum- 
mer shipments  has  so  depleted  the  supply  as  to  cause  some  disap- 
pointment in  this  respect ;  the  capabilities  of  our  country  are,  how- 
ever, almost  limitless. 

Direct  Foreign  Trade 

In  direct  shipments  hence  by  rail  on  bills  of  lading  to  foreign 
points  the  increase  is  very  marked,  the  aggregate  amounting  to  over 
77,000  tons,  mainly  provisions  and  grain.  Large  as  this  trade  is 
thus  shown  to  be,  it  does  not  embrace  nearly  all  the  property 
shipped  intended  for  export,  many  shippers  preferring  to  consign 
only  to  the  seaboard  cities  and  there  make  freight  arrangements 
across  the  ocean.  Importations  have  largely  increased,  the  details 
of  which  are  given  as  far  as  they  can  be  accurately  ascertained  from 
the  Custom  House.  Importation,  under  the  act  of  Congress  passed 
some  two  years  since,  has  now  been  fully  inaugurated,  and  our 
merchants  are  well  pleased  with  the  marked  improvement  it  gives 
over  the  old  method  of  opening,  handling  and  delay  at  the  point 
of  unloading  from  shipboard.  Under  the  operation  of  this  arrange- 
ment purchases  of  such  articles  as  are  imported  and  needed  in  the 
city's  trade  will  be  made  abroad,  rather  than  of  eastern  importers,  to 
a  much  greater  extent  than  heretofore. 

Grain  Warehousing 

The  destruction  of  a  large  percentage  of  our  grain  storage 
capacity  by  the  fire  of  1871  greatly  embarrassed  the  trade  during 
the  winter  and  spring  months  of  1872,  and  our  existing  storage  room 
being  fully  occupied,  before  the  opening  of  lake  navigation,  a  large 
amount  of  grain  was  marketed  elsewhere  that  under  other  circum- 
stances would  have  been  received  here.  The  work  of  reconstruction 
was  pressed  with  all  possible  vigor,  and  early  in  August  two  large 
elevators,  the  "Air  Line"  and  "Galena,"  were  opened  for  business ; 
these  are  located  on  the  north  side  of  the  river,  and  more  than 
restore  the  storage  capacity  at  that  point.  Later  in  the  season  the 
"National"  and  "Hough's"  elevators  were  completed  in  the  southern 
portion  of  the  city,  and  the  "Central  A"  is  in  a  good  state  of  forward- 
ness, so  that  when  it  is  done,  our  storage  room  for  bulk  grain  will 
exceed  by  nearly  or  quite  2,000,000  bushels  that  which  we  had 
previous  to  the  fire.  The  Messrs.  Hough  have  taken  out  a  license, 
and  propose  to  fully  conform  to  the  requirements  of  the  law  of  this 


[1872]  OF  THE  CITY  OF  CHICAGO  473 

state  in  regard  to  that  class  of  business.  The  others  have  not  as  yet 
acceded  to  the  law  in  regard  to  license  and  storage  rates,  but  are 
believed  to  be  now  operating  according  to  the  spirit  of  the  law  in 
other  respects.  The  propriety  and  necessity  of  a  strict  legal  enact- 
ment properly  enforced  in  regard  to  this  business  was  never  more 
apparent  than  the  last  year,  during  which  the  public  have  been 
pained  at  the  development  of  transactions  highly  derogatory  to  the 
commercial  character  of  our  city;  transactions  which  could  not 
have  occurred  had  the  requirements  of  the  law  of  the  state  been 
observed.  In  the  matter  of  grain  inspection,  the  state  assumed 
control  some  eighteen  months  since.  The  time  during  which  it  has 
exercised  this  supervision  has  so  far  been  very  opportune,  the  crops 
have  been  good,  and  the  grain  has  kept  remarkably  well,  and  with 
these  favorable  circumstances  the  system  has  not  encountered  the 
difficulties  which  have  been  met  in  previous  years.  Much  complaint 
is  made  of  irregularity  of  inspection,  both  in  and  out  of  the  elevators, 
and  some  of  our  largest  shippers  express  great  dissatisfaction  at  the 
manner  in  which  it  is  done.  The  inspection  of  so  large  an  amount 
of  grain  as  is  received  at  this  point  cannot  probably  be  made  satis- 
factory to  all,  and  the  closest  attention  by  honest  and  competent 
inspectors  is  all  that  can  be  expected.  No  such  violent  changes  in 
the  manner  of  inspecting  grain  as  are  understood  to  have  occurred 
in  August  last  (apparently  to  meet  a  contingency  in  the  market) 
should  ever  be  permitted,  and  a  more  recent  illustration  of  the 
irregularity  of  conducting  the  business,  wherein  a  large  quantity 
of  grain  was  withdrawn  from  one  elevator  as  of  one  grade,  and  sent 
to  another  where  it  was  inspected  as  a  higher  grade,  is  to  most 
minds  sufficient  evidence  that  to  some  degree  at  least  there  is  good 
ground  for  complaint. 

Transportation 

The  means  and  cost  of  transportation  has  probably  engrossed 
a  larger  share  of  public  attention  during  several  years  past  than  any 
other  question  of  public  concern,  and  the  proper  remedies  for  the 
evils  under  which  this  country  is  laboring  do  not  seem  to  have  as 
yet  been  devised.  Certainly  it  is  a  subject  worthy  of  the  most 
earnest  consideration,  for  upon  its  issues  depend  the  prosperity 
of  the  whole  country,  especially  that  portion  of  it  largely  devoted 
to  agricultural  pursuits.  When,  as  now,  it  costs  the  farmer  in 
many  cases  from  one-half  to  three-quarters  of  the  value  of  his  crop 
to  transport  it  to  market,  the  question  of  that  cost  presents  itself 
to  his  mind,  justly,  as  one  of  vital  importance. 

The  Secretary  concludes  his  discussion  of  the  transportation 
question  with  a  long  argument  in  favor  of  such  a  reciprocity  treaty 
as  would  "secure  the  immediate  completion  of  the  contemplated 
improvements  of  the  Welland  and  St.  Lawrence  Canals,  and  their 
free  use  for  our  commerce."  An  American  ship  canal  around  the 
Falls  of  Niagara,  for  which  the  Board  of  Trade  had  labored  for 
many  years,  seems  to  the  Secretary  unattainable,  and  the  discus- 
sion of  the  project,  therefore,  inopportune. 


474  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

Range  of  Prices  in  1872 

Original  sources  of  information  as  to  the  Board  of  Trade  af- 
fairs prior  to  1872  are  so  few  and  so  difficult  of  access  that  market 
quotations  have  been  given  in  this  history  in  greater  detail  than 
is  deemed  necessary  thereafter.  The  manipulation  of  the  wheat 
and  oats  market  during  the  current  year  has  already  been  described. 
No  serious  attempt  was  made  to  interfere  with  the  normal  market 
for  corn,  rye  and  barley,  and  though  prices  of  corn  and  rye  were  to 
some  extent  sympathetically  afifected  by  the  erratic  fluctuations 
of  wheat  and  oats.  No.  2  corn  was  about  10  cents  a  bushel  lower 
at  the  close  of  the  year  than  at  the  beginning,  although  it  sold  as 
high  as  48^c  in  May,  from  which  the  decline  to  the  close  of  the 
year  was  about  18c  per  bushel.  No.  2  rye  on  the  other  hand  gained 
about  5  cents  during  the  year,  closing  at  about  70  cents  per  bushel 
after  touching  93  cents  in  May,  and  selling  as  low  as  50  cents  in 
October.  No.  2  barley  also  showed  a  slight  gain  for  the  year, 
the  highest  and  lowest  prices  for  the  first  week  of  the  year,  60^^ 
@6Zy2  cents,  comparing  with  64@70  cents,  the  extremes  of  the  week 
ending  December  28th.  The  highest  price  of  the  year,  71  cents, 
was  reached  in  May,  when  other  grains  were  on  the  rampage ;  and 
the  lowest  price,  48  cents,  was  quoted  in  June  and  again  in  August. 

The  pork  corner,  already  referred  to,  influenced  prices  of  that 
commodity  during  most  of  the  year,  forcing  a  maximum  of  $16 
in  July;  but,  during  the  week  ending  December  28th  it  declined  as 
low  as  $11.40,  which  was  $1.50@2  below  the  market  of  the  first 
week  of  the  year.  The  price  of  live  hogs  suitable  for  packing  did 
not  get  far  away  from  $4@4.50  until  the  closing  weeks  of  the  year, 
when  a  decline  of  about  50  cents  per  hundred  pounds  was  recorded. 
Fair  to  choice  cattle  were  quoted  at  $3.25@5.75  in  the  first  week 
of  the  year,  advanced  to  $3.50@7.40  in  April,  declined  again  to 
$2.75@6.50  in  July,  and  the  last  half  of  the  year  showed  no  recovery, 
the  quotation  for  the  last  week  of  the  year  being  $3@6.2S  per  hun- 
dred pounds. 

1873 

As  has  been  noted,  the  year  1872,  following  the  great  fire,  was 
one  of  intense  activity  and  feverish  speculation.  By  the  opening 
of  1873,  Chicago  had  taken  on  a  more  conservative  course  and  the 
business  of  the  Board  of  Trade  was  without  the  exciting  events 
which  marked  the  year  preceding.  In  September  came  the  great 
panic,  but  that  was  mercifully  masked  from  the  minds  of  men, 
and  almost  until  the  disaster  was  upon  them,  the  business  men  of 
Chicago  and  of  the  Board  of  Trade  conducted  their  aflfairs  appar- 
ently without  thought  that  the  entire  financial  and  industrial  fabric 
of  the  United  States  was  to  be  shaken  to  its  very  center.  There 
were,  however,  many  interesting  events  prior  to  the  panic  and 
many  problems  which  the  Board  of  Trade  had  to  face  and  solve. 


[1873]  OF  THE  CITY  OF  CHICAGO  475 

The  chief  of  these  were  in  connection  with  the  new  warehouse  law, 
with  the  warehouses,  with  the  inspection  service  and  with  the 
rules  governing  the  conduct  of  the  Board  itself.  Financially,  the 
Board  of  Trade  was  in  good  condition  in  spite  of  the  increased  ex- 
penditures growing  out  of  the  fire  and  the  removal  to  the  new 
building.  The  membership  was  1,354,  being  a  gain  of  forty-five. 
The  cash  on  hand  in  January,  1872,  was  $32,981.64,  and  receipts 
from  all  sources  during  the  year  were  $49,885.88 ;  the  disbursements 
were  $81,665.91,  leaving  a  cash  balance  on  hand  of  $1,201.61.  Much 
of  this  expense  was,  however,  in  the  nature  of  permanent  invest- 
ment, and  the  assets  of  the  Board  were  $79,672.50.  The  Directors, 
in  their  report,  spoke  of  the  contract  with  the  Chamber  of  Com- 
merce, saying  they  had  rented  the  whole  building  in  the  rear  of 
the  main  hall  for  $10,000  per  annum,  the  Board  to  pay  all  over 
$30,000  of  the  cost  of  construction  including  the  fixtures.  The 
rent  of  offices,  however,  made  the  additional  sum  to  be  paid  by  the 
Board  merely  nominal.  The  Directors  also  stated  that  it  was 
expected  that  the  new  rules,  adopted  in  1872,  would  give  stability 
to  trade  and  prevent  manipulations,  and  the  Board  was  congrat- 
ulated upon  its  new  home,  its  high  standard  of  commercial  honor 
and  its  courage  to  institute  reforms  where  reforms  were  necessary. 
The  new  officers  were  C.  E.  Culver,  President ;  Howard  Priestly, 
Second  Vice-President ;  J.  F.  Armour,  Robert  Warren,  A.  Murison, 
Thomas  Wight,  and  E.  B.  Baldwin,  Directors.  At  the  annual  meet- 
ing speeches  were  made  by  several  of  the  incoming  officers  and 
votes  of  thanks  were  tendered  both  the  retiring  President,  J.  W. 
Preston,  and  the  Secretary,  Charles  Randolph. 

On  January  8th  the  Railroad  and  Warehouse  Commission  made 
its  second  report  covering  the  year  preceding.  The  report  was  a 
confession  of  the  weakness  of  the  law  and  of  its  defects,  and  said : 
"The  laws  under  which  we  are  to  act  lack  system  and  symmetry, 
and  presented  many  obscurities  of  language  and  meaning,  while 
the  remedies  provided  for  violation  of  the  laws  were  so  indefinite 
as  to  prove  practically  insufficient."  The  report  mentioned  the 
fact  that  the  attorney  general  had  given  an  opinion  to  the  effect 
that  the  act  was  imperfect.  The  Board  also  mentioned  the  com- 
plaint filed  by  the  Board  of  Trade  in  November,  1872,  relative  to 
the  underbilling  of  grain  and  also  outlined  action  taken  to  compel 
the  warehousemen  to  comply  with  the  law.  It  was  stated  that  suit 
against  the  warehousemen,  begun  in  September,  1871,  was  inter- 
rupted by  the  fire  which  destroyed  the  records.  The  case  was, 
however,  brought  to  trial  in  July,  1872,  a  verdict  of  "guilty"  re- 
turned and  a  fine  of  $100  assessed.  Appeal  was  taken  which  was 
still  pending.  Suits  as  to  excessive  storage  charges  had  been 
brought,  but  the  court  decided  that  there  was  no  public  remedy 
as  the  law  fixed  no  penalty.  Suits  for  overcharges,  begun  in  Jan 
uary,    1873,   were   brought  without   much   confidence   on   the   part 


476  HISTORY  OF  THE  BOARD  OF  TRADE  [1873J 

of  the  Board  on  account  of  the  vagueness  of  the  law,  and  the  Board 
stated  that  it  had  prepared  two  bills  to  replece  the  six  acts  then 
on  the  statute  books.  On  account  of  the  Iowa  Elevator  fraud,  the 
Board  stated  that  it  was  compelling  the  presentation  of  cancelled 
receipts  before  the  delivery  of  grain  was  permitted,  and  related  that 
its  efforts  to  prosecute  the  perpetrators  of  these  frauds  had  been 
delayed  because  a  first  grand  jury  had  ignored  their  complaint, 
although  a  second  grand  jury  had  brought  indictments.  The  Munn 
&  Scott  case  was  reviewed,  the  report  saying  that  after  the  Iowa 
Elevator  exposure  a  measurement  of  grain  in  all  elevators  had 
been  ordered;  that  Munn  &  Scott  said  their  grain  was  scattered 
and  that  they  wished  to  consolidate  it  in  bins  before  measure- 
ment was  taken,  and  that  they  used  this  time  to  build  false  bot- 
toms and  that,  owing  to  the  previous  high  standing  of  the  firm,  the 
inspectors  were  imposed  on.  The  Board  of  Trade  felt,  as  did  the 
commissioners,  that  the  new  law  was  weak  and  ineffective,  but 
their  ideas  as  to  how  it  should  be  improved  did  not  wholly  coincide 
with  the  commissioners'  opinion.  The  matter  was  discussed  by 
the  Committee  on  Miscellaneous  Subjects  of  the  Board  of  Direc- 
tors, and  it  was  urged  that  two  commissions  be  created,  one  for  the 
railroads,  and  another  for  warehouses,  and  also  that  the  Chief 
Grain  Inspector  should  be  appointed  by  the  commission.  This 
was  followed  by  a  general  meeting  of  the  Board  held  on  January 
25,  at  which  the  Milwaukee  methods  of  inspection  were  discussed, 
and  it  was  declared  to  be  one  of  the  main  objects  to  take  the  inspec- 
tion service  out  of  politics.  Resolutions,  offered  by  A.  M.  Wright, 
were  adopted  to  send  a  committee  to  Springfield  and  to  urge  that 
the  state  give  up  inspection  but  retain  its  regulation  of  warehouses 
and  see  that  they  acted  as  transfer  agents  merely.  It  was  found, 
however,  that  the  Board  was  not  unanimous  as  there  were  many 
conflicting  interests,  some  of  which  supported  the  law  practically 
as  it  stood.  As  a  result  of  this  meeting  the  committee  on  Mis- 
cellaneous Subjects  and  Secretary  Randolph  prepared  a  new  bill 
which  was  presented  to  the  legislature.  The  first  proposal  of  this 
bill  was  that  the  Board  of  Railroad  and  Warehouse  Commissioners 
be  divided  and  further  that  there  should  be  a  Warehouse  and  Grain 
Inspection  Commission,  to  be  appointed  by  the  Governor,  to  con- 
sist of  three  members,  no  one  of  whom  should  be  connected  with 
warehouse,  railroad,  or  transportation  interests.  .  The  salary  was 
placed  at  $1,000  and  the  commission  was  to  have  offices  in  Chicago, 
and  to  appoint  the  Chief  Grain  Inspector,  Assistant  Inspectors,  and 
Registrar.  The  commissioners  were  to  have  the  right  to  visit  the 
elevators  at  any  time  and  to  examine  their  books.  The  Inspector 
should  be  empowered  to  fix  grades  upon  twenty  days'  notice  and 
appeals  might  be  taken  to  the  Board  of  Commissioners ;  further 
that  no  grain  should  be  delivered  except  on  cancelled  receipts.  This 
bill  was  presented  to  the  Legislature  on  February  15th,  and  a  month 


[1873]  OF  THE  CITY  OF  CHICAGO  477 

later  it  was  reported  for  indefinite  postponement  by  the  House  com- 
mittee. The  next  week  a  strong  committee  of  the  Board  of  Trade 
visited  Springfield  to  urge  the  abolishment  of  State  inspection.  A 
little  later  President  Culver  contributed  a  lengthy  article  to  the 
Chicago  Tribune  in  which  he  opposed  State  inspection  and  quoted 
the  resolution  passed  by  the  National  Board  of  Trade  at  St.  Louis, 
in  1871,  to  the  effect  that  "All  state  inspection  is  unnecessary  and 
oppressive  to  the  mercantile  interests  of  the  State."  He  cited  that 
Milwaukee,  St.  Louis  and  Toledo  had  their  own  inspection  which 
was  working  satisfactorily.  Mr.  Culver  did  not,  however,  insist 
upon  the  abolishment  of  State  inspection,  but  urged,  at  least,  that 
the  law  be  amended  to  permit  new  grades  of  grain  to  be  established 
whenever  the  trade  demanded  a  quality  of  grain  not  provided  for 
by  the  existing  statute,  and  that  the  commissioners  should  appoint 
a  committee  on  appeals.  President  Culver,  A.  M.  Wright,  and 
others  appeared  before  the  Legislature  in  this  behalf.  While  not 
successful  in  securing  the  abolishment  of  State  inspection,  these 
amendments  were  contained  in  the  bill  introduced  by  Senator  Wil- 
liams which  was  finally  passed.  In  the  meantime  there  had  been 
a  bitter  contest  over  the  appointments  made  by  the  Governor  for 
the  Railway  and  Warehouse  Commission.  The  Governor  first  ap- 
pointed S.  H.  McCrea  of  the  Board  of  Trade  and  Messrs.  Robinson 
and  Stilwell.  These  appointments  met  with  strong  opposition  es- 
pecially on  the  part  of  the  Grange  organizations  and  the  friends  of 
Mr.  Morgan,  then  a  member  of  the  commission.  The  Grange  ap- 
pointed a  committee  of  fifteen  to  wait  upon  the  Governor,  and  the 
contest  was  carried  into  the  Senate,  where  it  became  so  bitter  that 
all  three  appointees  presented  their  resignations  for  the  Governor 
to  use  if  he  saw  fit.  The  Senate  committee  reported  unfavorably 
as  to  Messrs.  Robinson  and  Stilwell,  and  in  favor  of  Mr.  McCrea, 
whereupon  the  Governor  withdrew  all  three  names  from  the  Senate 
and  later  appointed  H.  D.  Cook  of  McLean  county,  D.  A.  Brown 
of  Sangamon,  and  John  M.  Pearson  of  Madison,  and  these  appoint- 
ments were  promptly  confirmed. 

In  the  latter  part  of  January  the  Cook  County  National  Bank 
brought  suit  against  George  Armour  &  Company  which  opened 
up  the  inner  secrets  of  the  elevator  combine.  This  suit  grew  out 
of  the  Munn  &  Scott  failure  and  the  petition  asked  to  have  George 
L.  Scott,  George  Armour,  A.  A.  Munger,  Hiram  Wheeler,  C.  W. 
Wheeler,  G.  H.  Wheeler,  James  R.  McKay,  P.  H.  Smith  and  George 
L.  Dunlap  adjudged  bankrupts  as  partners  in  the  firm  of  Munn  & 
Scott.  From  the  testimony  of  Hiram  Wheeler  it  was  shown  that 
the  elevator  men  expended  nearly  $400,000  to  take  up  the  fraudu- 
lent receipts  issued  by  Munn  &  Scott,  purchasing  between  60,000 
and  80,000  bushels  of  wheat  and  570,000  bushels  of  corn.  The  Cook 
County  National  Bank  failed  to  recover  through  this  action.  In 
March,  the  assignees  of  Munn  &  Scott  asked  the  transfer  of  the 


c 


478  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

title  in  property  held  by  Jesse  Hoyt  &  Co.  and  George  Armour  & 
Co.  to  the  assignees.  This  action  involved  mortgage  notes  given  to 
Hoyt  &  Co.  for  $350,000,  it  being  claimed  that  this  loan  violated  the 
laws  of  Newf  York  in  that  the  interest  rate  was  illegal  and  the 
notes  given  for  more  than  the  amount  due.  It  was  also  claimed 
that  the  transfer  of  the  Munn  &  Scott  interests  to  George  Armour 
&  Co.  was  made  with  fraudulent  intent.  The  disclosures  made  at 
these  trials  fully  exposed  the  methods  and  ownership  of  the  Chi- 
cago warehouses  and  seemed  to  justify  much  that  had  been  alleged 
as  to  a  warehouse  combine.  There  was  also  litigation  between 
Jesse  Hoyt  and  George  Armour  &  Co.,  and,  in  September,  the 
court  refused  to  recognize  the  sale  made  to  Armour  &  Co.  and  the 
Munn  &  Scott  interests  were  put  up  for  sale  and  were  bought  in 
by  Hoyt.  It  was  the  day  following  this  sale,  Sept.  6th,  when  the 
Fulton  elevator  burned,  George  Armour  &  Co.  being  the  lessees. 
The  building  contained  about  120,000  bushels  of  corn,  and  5,000 
bushels  of  oats,  the  damaged  grain  being  bought  by  J.  B.  Lyon 
for  $4,000.  The  elevator  was  completely  destroyed.  It  was  one 
of  the  oldest  elevators  in  the  city,  having  been  built  by  Munn  & 
Scott  in  1852.  It  was  announced  that  Hoyt  &  Co.,  the  new  owners, 
would  rebuild  at  once. 

In  January,  1873,  the  Board  of  Trade  found  itself  confronted 
by  a  serious  blockade  in  transportation.  It  was  urged  that  the 
Board  appoint  a  committee  to  investigate  and  it  was  charged 
that  much  of  the  trouble  was  due  to  minor  railroad  officials,  and 
that  a  local  freight  officer  made  from  $45,000  to  $50,000  a  year 
while  the  line  which  he  represented  could  hardly  pay  5  per  cent 
upon  its  capital  stock.  A  great  storm,  on  January  23,  added  to  the 
blockade  and  by  February  1  it  was  announced  that  the  car  famine 
had  caused  almost  a  complete  tieup  in  Chicago,  made  money  scarce, 
overcrowded  the  elevators,  and  held  back  shipments.  This  situa- 
tion grew  more  acute  and  by  the  middle  of  February  the  ware- 
houses were  full  of  grain  and  grain  on  the  track  was  at  one  cent 
per  bushel  discount.  The  Buckinghams  tried  to  relieve  the  situa- 
tion by  loading  200,000  bushels  on  vessels  in  the  harbor.  The 
hopes  of  those  who  wished  better  regulation  of  railroad  traffic 
were  dashed  when  the  Supreme  Court  of  Illinois  handed  down  a 
decision,  on  February  23d,  declaring  the  law  against  railroad  dis- 
crimination unconstitutional,  and  that  unjust  discriminations  were 
the  only  ones  subject  to  legislation.  It  was  not  until  the  opening 
of  navigation  that  the  complaints  as  to  the  action  of  the  railroad 
and  the  lack  of  storage  capacity  ceased.  In  fact  this  was  a  year 
of  great  agitation  directed  particularly  against  the  railroads,  and 
the  newspapers  were  filled  with  the  reports  of  farmers'  conven- 
tions and  antimonopoly  meetings,  with  many  resolutions  directed 
against  the  alleged  extortions  of  the  railroad  companies. 

In  February,  attention  was  called  to  the  extensive  "doctoring" 


[1873]  OF  THE  CITY  OF  CHICAGO  479 

of  barley.  It  was  said  that  there  were  three  establishments  for  this 
purpose  in  Chicago,  and  that  sulphur  was  used  to  give  a  false  ap- 
pearance and  that  the  process  netted  the  firms  from  15  to  25  cents 
per  bushel.  This  abuse  grew  so  great  that  Armour,  Dole  &  Co.  re- 
fused to  accept  any  grain  sent  them  from  these  cleaning  mills.  The 
new  inspection  service,  with  W.  H.  Harper  as  chief,  and  O.  L. 
Parker  as  assistant,  began  operations  in  April,  one  of  the  first  acts 
being  to  inspect  seven  boatloads  of  grain  as  "rejected."  This  act 
met  with  both  approval  and  disapproval,  and  was  taken  to  indicate 
that  the  standard  would  be  high.  On  April  26  the  new  Chief  In- 
spector issued  a  statement  that  "all  grain  in  unmerchantable  con- 
dition, or  that  had  been  subject  to  any  chemical  process  would  be 
graded  "unmerchantable."  On  the  other  hand,  on  April  30,  L.  J. 
Kadish  filed  charges  against  the  inspector  at  the  Rock  Island  Ele- 
vator alleging  that  barley,  inspected  as  No.  2,  was  not  good  No.  3. 
That  the  charges  were  well  founded  was  indicated  by  the  fact  that 
the  subinspector  was  suspended.  During  the  legislative  session 
a  Senate  committee  was  appointed  to  investigate  the  Union  Stock- 
yards against  which  complaints  had  been  made  by  shippers.  The 
committee  found  the  yards  in  bad  condition,  but  stated  that  this 
was  partially  due  to  the  fact  that  a  severe  winter  had  been  fol- 
lowed by  a  sudden  thaw,  and  it  had  been  impossible  to  get  the 
yards  in  condition  at  that  time.  The  complaints  were  also  against 
alleged  overcharges  for  feed,  and  this  was  entered  into  by  the  com- 
mittee. It  was  recommended  that  standard  scales  be  installed 
and  that  the  stockyards  be  placed  under  the  supervision  of  the 
Railroad  and  Warehouse  Commission  and  subject  to  inspection 
at  least  four  times  a  year.  Another  legislative  incident,  showing 
the  general  feeling  in  regard  to  violations  of  the  warehouse  law, 
was  the  introduction  of  a  bill  to  close  warehouses  refusing  to  take 
out  a  license.  In  March,  Hough  Bros.  &  Co.,  a  firm  which  had 
been  operating  an  "independent"  elevator,  announced  that  it  would 
increase  its  rates  to  those  charged  by  other  elevators,  and  it  was 
claimed  that  this  elevator  had  been  bought  by  the  combine. 

George  T.  Brine,  a  member  of  the  firm  of  J.  B.  Lyon  &  Co., 
who  had  been  suspended  from  the  Board  following  the  corner  in 
which  that  firm  was  involved,  went  before  the  courts,  in  March, 
asking  that  the  Board  of  Trade  be  compelled  to  restore  him  to 
membership.  In  his  petition  he  alleged  that  the  firm  of  J.  B.  Lyon 
&  Co.  had  been  suspended,  but  that  the  firm,  as  such,  held  no  mem- 
bership, memberships  being  held  by  the  individuals  composing  the 
firm.  It  was  also  claimed  that  insufficient  notice  of  trial  had  been 
given,  and,  further,  that  the  failure  of  the  operation  which  brought 
about  the  disaster  to  the  firm  was  caused  by  enormous  inspection 
frauds  between  August  1  and  21,  1872,  by  which  large  quantities  of 
inferior  wheat  were  delivered  to  them  as  No.  2.  This  charge,  as  to 
fraudulent  inspection,  was  backed  by  affidavits  from  such  prominent 


480  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

Board  of  Trade  operators  as  E.  K.  Bruce,  S.  G.  Hooker,  S.  H.  McCrea, 
H.  H.  Ross,  and  others,  and  also  by  purchasers  of  grain  in  Mon- 
treal. The  Board  of  Trade  defended  its  position  before  Judge  Wil- 
liams' court,  but,  in  July,  Mr.  Brine's  contention  was  upheld,  the 
court  saying  that  the  Board  of  Trade  had  power  to  suspend  mem- 
bers, but  must  do  it  according  to  law,  and  Mr.  Brine's  restoration 
was  ordered  on  account  of  irregularities  in  the  trial.  Mr.  Brine 
had  many  friends  upon  the  Board  and  the  ruling  of  the  court  was 
commended,  and  Mr.  Brine's  first  appearance  upon  'Change,  in 
August,  was  welcomed  with  much  friendliness.  In  June  two  other 
members  were  restored  to  the  privileges  of  the  Board.  These  were 
C.  G.  and  J.  H.  Wicker,  who  had  been  expelled  in  October,  1865. 
The  transaction  which  led  to  their  expulsion  had  been  taken  into 
the  court  and  decided  in  their  favor,  whereupon  the  Board  has- 
tened to  do  them  justice  so  far  as  possible.  The  first  agitation  for 
the  organization  of  a  Grain  Receivers'  Association,  similar  to  the 
organization  of  pork  packers  and  of  vessel  owners,  was  made  in 
April,  and  on  the  17th  of  that  month  the  Board  of  Trade  rejoiced 
in  a  new  bell  which  was  placed  in  the  small  hall  of"  he  Chamber 
of  Commerce  to  be  rung  at  11  a.  m.  and  3  p.  m.  daily.  A  few  days 
later  a  rule  limiting  the  hours  of  trading  was  adopted,  no  contracts 
to  be  enforced  which  were  not  made  between  the  hours  of  9  a.  m. 
and  5  p.  m.  Thereafter  the  bell  was  rung  at  9  and  11  a.  m.  and  3 
and  5  p.  m.  On  April  24th  the  Board  was  shocked  by  the  suicide 
of  the  Marquis  De  Belloy.  His  career  had  been  a  spectacular  one. 
Inheriting  in  France  a  fortune  estimated  at  $300,000,  he  dissipated 
a  large  portion  of  it  in  Europe,  and  then  came  to  America  to  recoup 
his  fortune.  Before  coming  to  Chicago  he  had  spent  most  of  the 
pittance  which  still  remained,  when  $80,000  was  bequeathed  him 
by  a  relative.  When  this  was  nearly  gone  he  retired  to  Michigan 
and  started  a  country  grocery  store.  Again  accumulating  funds,  he 
reappeared  on  'Change  and  finally,  meeting  with  further  losses,  he 
ended  his  life  rather  than  to  be  "read  off"  as  delinquent.  He  was 
a  protege  of  N.  K.  Fairbank  and  was  popular  with  members  of 
the  Board.  A  purse  of  $1,000  for  the  relief  of  his  widow  was  quickly 
subscribed  by  the   members. 

Considerable  feeling  was  created  on  'Change  when  it  was  an- 
nounced that  the  pork  packers  were  contemplating  separating  from 
the  Board  of  Trade  and  had  appointed  a  committee,  consisting  of 
H.  Botsford,  B.  P.  Hutchinson,  and  B.  F.  Howard,  to  secure  rooms 
for  their  organization.  While  the  markets  had  undergone  some 
violent  fluctuations  during  the  earlier  months  of  the  year,  as,  in  the 
latter  part  of  February,  when  prices  were  affected  by  a  panic  on 
Wall  Street  and  gold  was  forced  down  to  $1.14%,  and,  in  April, 
when  there  was  a  flurry  in  provisions  and  corn ;  the  first  approach 
to  a  corner  was  in  June  when  B.  F.  Murphey  and  B.  F.  Allen,  the 
Des  Moines  banker  who  had  but  recently  removed  to  Chicago, 


[1873]  OF  THE  CITY  OF  CHICAGO  481 

conducted  an  operation  in  No.  2  spring  wheat  for  June  delivery. 
They  began  operations  in  May  and  by  June  8th  were  credited  with 
the  ownership  of  2,000,000  bushels.  On  June  7th,  July  wheat  was 
quoted  at  $1.23  and  June  at  $1.28^4,  indicating  an  inflation  of  about 
5J/2  cents.  Murphey  &  Allen  made  repeated  calls  for  margins  and 
refused  all  attempts  at  settlements.  This  aroused  much  feeling 
and  Allen  was  accused  of  using  the  funds  of  the  Cook  County  Na- 
tional Bank  and  exerting  his  influence  as  an  official  of  the  North- 
western and  Rock  Island  Railroads  to  prevent  shipments.  On  June 
9th,  however,  settlements  were  accepted. 

On  June  14th  something  over  23,000  bushels  of  No.  2  corn  at 
the  Northwestern  Elevator  were  posted  as  "hot,"  forcing  the  price 
of  cash  corn  3  cents  below  the  July  future.  On  the  16th,  31,000 
bushels  at  the  Fulton  Elevator  was  posted  and  the  market  broke 
another  2  cents.  On  June  21  the  Chicago  Tribune  contained  an 
editorial  charging  that  the  posting  of  this  corn  was  largely  unnec- 
essary ;  that  but  a  small  quantity  of  grain  was  affected,  and  that 
the  posting  was  in  the  nature  of  a  market  manipulation.  It  stated 
that,  because  approximately  55,000  bushels  of  corn  had  been  posted 
as  "hot,"  a  depreciation  of  11  cents  per  bushel  had  been  caused  on 
all  corn  in  store,  entailing  an  estimated  loss  of  $1,100,000  to  own- 
ers and  shippers.  It  was  stated  that  holders  of  grain  at  one  elevator 
agreed  to  ship  in  concert  and  found  that  out  of  23,000  bushels  of 
corn  declared  out  of  condition  but  1,500  bushels  were  "hot."  It 
also  stated  that  there  was  not  enough  corn  of  any  kind  in  the  ware- 
houses to  meet  the  "hot  corn"  receipts.  Under  the  influence  of 
these  postings,  corn,  on  June  20,  reached  a  lower  point  than  at 
any  time  during  the  previous  twelve  years.  There  were  more 
rumors  of  "hot"  corn  and,  on  the  21st,  61,000  bushels  at  the  Hough 
Elevator  was  posted.  The  Tribune  editorial  caused  great  commo- 
tion and  a  resolution  for  a  full  investigation  was  adopted  on  June 
23rd.  The  investigating  committee  consisted  of  J.  W.  Sykes,  H. 
C.  Ranney,  and  Asa  Dow,  and  their  report,  which  was  submitted 
June  26th,  justified  the  posting  and  criticized  the  Tribune  severely. 
That  newspaper  quoted  Thomas  H.  Seymour  as  its  authority. 
Hiram  Wheeler  made  the  statement  before  the  committee  that 
there  was  "no  more  hot  corn  this  year  than  usual."  July  16th, 
30,000  bushels  of  corn  in  the  National  Elevator  and  88,000  bushels 
in  the  Central  Elevator,  "B"  was  posted  as  "hot."  Still  later  in 
the  month  61,000  bushels  was  added  to  the  "hot"  list.  Aside  from 
the  disastrous  break  in  corn  prices,  one  other  result  of  this  episode 
was  a  continued  and  persistent  crusade  on  the  part  of  the  Tribune 
against  the  warehousemen,  which  aided  in  bringing  about  exposures 
later  in  the  year.  The  first  real  corner  of  the  year  developed  in  July 
wheat.  On  the  30th  of  that  month  July  wheat  was  quoted  at  $1.32 
and  August  at  $1.14,  a  difference  of  18  cents.  The  corner  cul- 
minated July  31st  amidst  great  excitement.     William  Young,  who 


482  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

conducted  the  deal,  bidding  $1.41  and  higher  and  one  transaction 
being  reported  at  $1.46.  The  profits  were  reported  at  $130,000, 
but  the  losses  were  divided  among  so  many  so  that  no  failures  re- 
sulted. The  account  of  the  market  for  the  day  stated  that  Mr. 
Young  got  a  hatful  of  watches  as  pledges  of  later  settlement.  There 
were  rumors  that  J.  B.  Lyon  was  at  the  head  of  this  corner  oper- 
ating for  Montreal  parties,  but  it  was  found  that  it  was  engineered 
by  Milwaukee  grain  dealers.  Wheat  fell  21  cents  with  the  ending 
of  the  corner  and  closed  at  $1.19  on  the  following  day.  As  an  after- 
math of  this  corner  Mr.  Hall  secured  a  court  injunction  against 
William  Young  and  the  directors  of  the  Board  of  Trade,  prohibit- 
ing them  from  proceeding  against  him  for  his  refusal  to  settle. 
During  the  excitement  of  this  corner,  on  July  25th,  a  resolution 
was  passed  that  "contracts  for  delivery  of  wheat  may  be  satisfied 
by  the  delivery  of  either  old  or  new  wheat  unless  otherwise  stated 
in  the  contract."  On  July  29th,  however,  the  directors  recommended 
to  the  Warehouse  Commissioners  that  they  order  a  distinction  to 
be  made  between  receipts  for  new  and  old  grain  "to  continue  for 
such  a  length  of  time  as  the  commissioners  shall  deem  proper." 

On  August  18th  the  Chicago  newspapers  sounded  the  first  note 
of  warning  of  the  great  crash  which,  at  that  time,  was  unthought 
of.  The  headlines  stated  that  a  bitter  conflict  in  Wall  Street  was 
imminent  between  speculators  in  gold ;  that  the  Gould  clique  was 
manipulating  the  market  for  a  currency  lockup  and  had  formed  a 
strong  combination  to  repeat  the  experiences  of  the  memorable 
Black  Friday,  and  that  the  bears  had  urgently  petitioned  President 
Grant  to  interfere.  The  tone  of  business  was  very  optimistic,  how- 
ever. On  August  24th  the  financial  column  of  the  Tribune  stated : 
"The  week  closed  very  active  in  finance  and  trading.  The  abrupt 
change  from  the  dullness  of  ten  days  ago  is  the  subject  of  gen- 
eral remark,  and  has  imparted  a  more  cheerful  tone  to  the  views 
of  bankers  and  merchants  regarding  the  prospects  for  a  profitable 
fall  trade  and  a  prosperous  year  as  the  result  of  the  abundant  crops." 
On  September  2,  however,  the  possibilities  of  financial  stringency 
were  mentioned  and  it  was  stated  that  "The  great  feature  of  local 
finances  was  the  outflow  of  money  to  the  country,  the  results  show- 
ing in  equally  great  receipts  of  wheat."  The  Dun  report  showed 
expectation  of  good  fall  trade  throughout  the  West,  but  with  the 
prospects  not  so  good  in  the  East.  On  September  6th  there  was 
report  of  great  excitement  in  Wall  Street  over  the  decline  in  gold 
from  $1.15i<2  to  $1.14>^,  and  it  was  rumored  that  J.  Gould  had 
failed.  The  Chicago  elevators  were  crowded  with  grain  and  East- 
ern roads  were  so  rushed  that  they  were  compelled  to  refuse  ship- 
ments, for  a  few  days.  As  late  as  September  17th,  it  was  announced 
by  a  financial  writer  that  all  conditions,  except  transportation,  were 
favorable  to  prosperous  times. 

During  these  days  the  afifairs  of  commerce  and  of  the  Board 


[1873]  OF  THE  CITY  OF  CHICAGO  483 

of  Trade  moved  along  without  apparent  premonition  of  disaster. 
On  Sept.  10th  the  National  Pork  Packers'  Association  convened 
in  Chicago,  being  welcomed  by  Col.  John  L.  Hancock;  President 
Culver  extended  the  courtesies  of  the  Board  of  Trade,  which  were 
later  accepted.  New  York,  Missouri,  Michigan,  Ohio,  Indiana, 
California,  Maine,  Iowa,  Kentucky,  Wisconsin,  Kansas,  Maryland, 
Illinois,  Pennsylvania,  Tennessee,  Nebraska,  Rhode  Island,  Massa- 
chusetts and  Canada  were  represented.  C.  M.  Culbertson  was  ap- 
pointed as  a  member  of  the  Committee  on  Business  but  refused  to 
serve,  in  consequence  of  the  action  taken  the  previous  evening  by 
the  brokers  and  dealers  in  their  program  laid  down  for  voting  in 
the  convention.  Under  the  new  rule  adopted  the  packers  felt  that 
they  could  not  have  a  fair  show  in  the  convention  and  preferred 
to  look  on,  rather  than  to  disturb  its  harmony.  One  of  the  pro- 
posed acts  of  the  convention  was  a  provision  making  196  pounds 
the  standard  for  a  barrel  of  pork.  The  Chicago  packers  stated  that 
they  could  not  agree  to  this,  unconditionally,  as  they  must  be  bound 
by  the  rules  of  the  Chicago  Board  of  Trade,  which  was  a  legal  body, 
whereas  the  convention  was  not ;  but  they  agreed  to  adopt  this 
standard  if  it  was  acceptable  to  the  Board  of  Trade.  The  packers 
held  a  separate  meeting  at  which  Mr.  Culbertson  said  the  packers 
must  control  their  own  business,  and  that,  although  their  financial 
interests  were  larger,  they  were  easily  out-voted  by  the  brokers  in 
joint  session.  The  convention  ended  harmoniously,  however,  with 
a  banquet  at  the  Sherman  House  at  which  the  address  of  welcome 
was  given  by  Howard  Priestly,  Vice  President  of  the  Board  of  Trade. 
On  Sept.  15th  an  inaugural  excursion  train  was  run  fromChicago 
to  Lake  Kampeska,  Dakota,  over  the  new  line  of  the  Northwestern, 
via  Madison.  President  Culver,  J.  B.  Lyon,  and  Hiram  Wheeler 
were  members  of  the  party  and  this  was  hailed  as  another  opening 
for  the  Chicago  market,  the  Madison  division  being  63'1  miles  long. 
On  Sept.  16th  occurred  the  suicide,  in  the  Chamber  of  Commerce 
building,  of  Capt.  Dennis  Chapman.  He  had  undergone  a  series 
of  misfortunes  after  the  fire,  was  short  on  corn  and  would  have 
been  "read  off"  at  noon  on  the  day  of  his  death. 

The  Panic  of  1873 

On  the  morning  of  September  19  the  whole  financial  and  busi- 
ness structure  of  the  United  States  was  shaken  to  its  foundation 
by  the  glaring  announcement  of  the  failure  of  the  banking  house 
of  Jay  Cooke  &  Company,  of  Philadelphia  and  New  York.  This 
was  one  of  the  great  financial  institutions  of  the  country,  and  its 
ramifications  extended  into  every  city  and  into  every  industry.  It 
was  stated  that  the  firm  was  overloaded  with  $85,000,000  of  North- 
ern Pacific  bonds.  The  Chicago  papers  hastened  to  say  that  the 
West  was  overflowing  with  crops  at  good  prices  and  that  there 
could  be  no  panic.     On  September  18  the  prices  of  produce  were 


484  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

as  follows:  No.  2  spring  wheat,  $1.11^;  No.  2  corn,  41J/2  cents; 
No.2  oats,  3014  cents;  No.2  rye,  6854@69  cents;  No.2  barley,  $1.40. 
Following  this  first  announcement  of  the  Cooke  failure  nineteen 
failures  were  recorded  in  New  York  and  nine  in  Philadelphia. 
Wheat  fell  2  cents  on  the  Chicago  market  and  all  other  produce 
prices  were  lower.  On  the  day  following  the  situation  was  worse. 
It  was  announced  that  there  was  a  run  on  the  Union  Trust  Com- 
pany of  New  York  and  that  President  Grant  had  rushed  to  Wash- 
ington to  devise  measures  to  check  the  disaster.  Later  it  was 
announced  that  there  was  a  run  on  the  Freedman's  Savings  Bank 
in  Washington  and  that  the  Secretary  of  the  Treasury,  Richardson, 
had  ordered  the  purchase  of  $10,000,000  in  bonds.  Nevertheless, 
on  September  20,  the  Chicago  "Tribune"  said :  "The  only  effect 
the  financial  panic  in  New  York  has  had  thus  far  on  afifairs  in 
Chicago  has  been  to  diminish  financial  transactions."  Next  came 
the  report  that  the  Union  Trust  had  gone  under,  but,  on  the  22nd, 
the  Chicago  papers  announced  that  "the  financial  flurry  is  passed, 
or  nearly  so."  The  second  stage  of  the  panic  was  reached  Septem- 
ber 23,  upon  the  announcement  of  the  failure  of  Henry  Clews  & 
Company  of  New  York.  This  caused  a  loss  in  confidence  in  sound 
banks.  The  receiving  and  shipment  of  produce  was  practically  sus- 
pended, owing  to  the  scarcity  of  money  and  the  impossibility  of 
making  exchange  on  New  York  banks.  There  was  no  currency 
on  the  Board  of  Trade,  and  it  was  impossible  to  make  loans;  but 
settlements  were  not  forced.  It  was  reported  that  the  Milwaukee 
Exchange  had  adjourned,  and  there  was  some  who  wished  the 
Chicago  Board  of  Trade  to  do  likewise.  Wheat  was  6^  cents 
lower,  reaching  97^  cents.  It  was  reported  that  all  construction 
work  on  the  Northern  Pacific  had  been  suspended  and  that  the 
New  York  banks  were  issuing  clearing  house  certificates.  On  Sep- 
tember 24  the  situation  was  still  worse,  wheat  fell  to  90  cents,  with 
all  other  produce  prices  falling  in  proportion.  In  this  emergency 
the  Board  of  Directors  made  the  following  historic  recommendation 
to  the  Board  of  Trade,  a  recommendation  the  adoption  of  which 
can  always  be  pointed  to  with  pride  by  the  Chicago  Board  of  Trade. 
It  was  as  follows :  "That  business  be  pursued  on  as  conservative 
a  basis  as  possible,  and  that  efforts  be  made  to  adjust  outstanding 
trades  maturing  the  present  month  on  an  equitable  basis  ;  that  trans- 
actions be  limited  to  settlements  of  outstanding  contracts  and  to 
sales  of  property  for  cash ;  and  that  in  all  transactions  liberality  and 
reasonable  confidence  be  extended  where  the  same  would,  under 
ordinary  circumstances,  be  proper."  This  recommendation  inspired 
confidence  and  prevented  any  motion  to  adjourn.  On  the  follow- 
ing day  there  appeared  to  be  a  lull  in  the  storm  and  the  low  prices 
attracted  many  buyers  who  had  cash  and  who  believed  that  the 
worst  of  the  storm  was  over.  The  stockyards,  however,  were  con- 
gested, there  being  insuflicient  funds  to  sustain  the  market,   and 


[1873]  OF  THE  CITY  OF  CHICAGO  485 

it  was  stated  that  the  yards  could  receive  no  more  shipments.  Under 
the  force  of  buying,  wheat  went  up  from  5  to  7  cents.  On  Septem- 
ber 26  there  came  the  announcement  of  the  failure  of  five  Chicago 
national  banks.  This  was  followed  by  the  false  rumor  that  all  the 
banks  of  Chicago  were  about  to  close.  The  Exchange  was  para- 
lyzed, and  Chicago  became  the  center  of  the  financial  excitement. 
It  was  in  the  face  of  this  crisis  that  the  Board  of  Directors  met  and 
concluded  to  stop  future  trading,  but  announced,  boldly  and 
defiantly,  that  "The  Board  of  Trade  will  not  close  its  doors  and  let 
it  go  out  that  Chicago  is  busted."  This  was  received  on  'Change 
with  applause  and  cheers.  To  carry  out  the  recommendation  of  the 
Directors,  the  following  resolution  was  adopted :  "That  all  rules 
of  this  Board  authorizing  the  Board  of  Directors  to  consider  and 
act  on  complaints  for  violation  of  contract  be  suspended,  so  far 
as  such  complaints  are  based  on  contracts  for  the  delivery  of  prop- 
erty in  future,  made  between  the  passage  of  this  resolution  and  the 
further  order  of  the  association ;  and,  further,  that  the  Board 
shall  not  entertain  complaints  for  the  violation  of  contracts  claimed 
to  have  been  closed  during  the  time  above  indicated  by  reason  of  a 
non-deposit  of  a  margin ;  provided,  that  this  resolution  shall  in  no 
case  be  held  to  apply  to  any  trades  made  in  settlement  of  existing 
contracts."  This  resolution  was  carried  unanimously.  President 
Culver  speaking  in  its  behalf  and  urging  that  "Chicago  holds  the 
key  of  her  security  in  her  own  hands." 

This  action  was  taken  on  the  day  on  which  it  was  assured  that 
the  Union  National,  the  Cook  County,  the  Manufacturers,  the 
National  Bank  of  Commerce  and  the  Second  National  Bank  had 
failed.  Of  that  day  the  Chicago  "Tribune"  said :  "Today  was 
another  dark  day  in  produqe  circles,  and  the  darkest  of  all  the  dark 
ones  in  the  present  financial  crisis.  Every  one  took  heart  last  even- 
ing and  early  this  morning,  the  most  hopeful  view  of  the  situation 
being  warranted  by  the  readiness  with  which  money  came  in  here 
for  the  purchase  of  produce.  All  these  hopes  were  dashed  to  pieces 
when  it  became  known  that  the  Union  National  Bank  had  closed 
its  doors  and  each  of  those  pieces  was  broken  into  several  smaller 
ones  when  the  closing  up  of  other  banks  was  announced  in  quick 
succession.  The  markets  at  once  fell  flat,  and  the  strength  pre- 
viously manifested  departed.  A  great  deal  of  money  was  on  the 
floor,  sent  or  brought  here  for  the  purchase  of  grain  at  the  prices 
current  yesterday.  But,  when  things  became  noised  about,  the 
holders  held  on  to  it,  with  few  exceptions,  anticipating  a  further 
decline,  while  some  were  afraid  to  invest  at  any  price,  fearing  that 
the  panic  would  reach  every  bank  in  the  country.  Hence  there  was 
little  done  today  and  prices  sagged  again,  though  the  receipts 
exhibited  a  falling  ofif  in  volume  that  was  calculated  to  stiffen 
quotations.  Options  suffered  in  sympathy  with  cash  grain  and  the 
day  was  altogether  one  of  the  worst  on  record,  not  excepting  the 


486  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

two  or  three  that  immediately  followed  the  great  fire."  The  awk- 
wardness of  the  situation,  indeed  the  utter  impossibility  of  doing 
business  on  the  usual  basis  on  the  Board  of  Trade,  revived  the 
proposition  to  shut  up  the  Board  for  a  while  after  the  example  of 
Milwaukee,  but  this  course  was  neither  prudent  nor  possible,  while 
it  was  desirable  to  cut  off  future  delivery  trading,  which  was  prac- 
tically done  today  by  the  "adoption  of  the  recommendation  of  the 
Directors  by  the  unanimous  vote  of  the  Board.  After  this  trading 
was  confined  almost  entirely  to  settlements,  though  a  few  cash  lots 
of  grain  changed  hands  for  currency." 

Although  the  Third  National  Bank  suspended  on  September  27, 
it  was  stated  that  the  financial  sky  was  brightening,  that  the  New 
York  Stock  Exchange  would  reopen  on  the  30th,  and  that  three  of 
the  local  suspended  banks  would  resume  in  a  short  time.  On  the 
29th  wheat  went  up  from  4  to  5  cents,  and  corn  was  2  cents  higher. 
The  situation  steadily  improved  and,  on  October  1,  the  Board  of 
Trade  passed  the  following  resolution :  "Whereas,  The  Board  on 
the  26th  ult.  adopted  by  an  unanimous  vote  a  resolution  suspend- 
ing certain  of  its  rules  until  the  further  order  of  the  association, 
and,  Whereas,  It  is  now  believed  the  said  suspension  has  accom- 
plished all  it  was  intended  to  do,  and  as  the  financial  status  of 
affairs  in  the  city  and  country  has  in  a  large  measure  resumed  its 
previous  course,  therefore,  Resolved,  That  the  time  during  which 
said  suspension  shall  continue,  shall  cease  on  the  adoption  of  this 
resolution."  After  the  passage  of  this  resolution  all  new  trades 
were  subject  to  the  ordinary  rules.  It  is  worthy  of  note  that  the 
Chicago  Exposition  opened  during  the  very  height  of  this  panic  with 
large  attendance.  The  situation  continued  to  improve  and,  on 
October  5,  A.  M.  Wright  &  Company  was  given  the  credit  of  being 
the  first  firm  or  at  least  one  of  the  first,  to  announce  that  it  would 
honor  drafts  made  by  country  shippers.  This  temporary  lull  was 
followed,  on  October  14,  by  another  stock  panic  in  New  York,  in 
which  the  Vanderbilt  interests  were  the  storm  center.  Near  the 
end  of  October  occurred  the  failure  of  Hoyt,  Sprague  &  Company 
and  of  Claflin  &  Company,  and  on  the  5th  of  November  gold  reached 
$1.06%,  the  lowest  point  it  had  touched  since  1862.  By  this  time 
the  panic  had  become  universal  throughout  the  United  States. 
Manufactories  were  closed,  transportation  lines  were  crippled, 
credits  were  largely  destroyed,  farm  produce  prices  were  unre- 
munerative  and  the  army  of  the  unemployed  was  increasing  daily. 
It  was  not  until  the  latter  part  of  November  that  there  was  any 
permanent  strength  in  the  produce  market.  The  crisis  in  the  diplo- 
matic relations  between  the  United  States  and  Spain  over  the 
capture  of  the  "Virginius"  and  its  crew  in  Cuba,  which  brought 
the  two  countries  to  the  verge  of  war,  had  but  slight  eft'ect  on  the 
depressed  market,  although  gold  went  up  to  $1.10.  November  27, 
however,  wheat  went  up  4  cents  and  the  market  was  excited.    This 


[1873]  OF  THE  CITY  OF  CHICAGO  487 

general  advance  in  prices  continued  into  December,  but  the  money 
market  did  not  regain  its  normal  condition  during  the  remainder  of 
the  year,  and  at  the  Christmas  season  it  was  reported  that  there 
were  many  thousands  of  unemployed  men  in  Chicago,  and  these 
unfortunates  organized  and  held  large  meetings,  demanding  that 
the  city  provide  them  with  work. 

It  was  during  the  height  of  the  panic,  in  the  first  week  of 
October,  that  the  first  rumors  were  spread  as  to  the  fraudulent 
practices  of  the  Hough  Elevator.  R.  M.  and  O.  S.  Hough  were 
accused  of  writing  receipts  for  grain  that  had  never  been  received 
into  their  elevator,  and  of  procuring  the  cancellation  of  these  receipts 
by  fraudulent  representation  to  the  registrar,  S.  Clary.  The  details 
as  given  were  that,  on  September  18,  the  firm  loaded  lake  vessels 
with  two  cargoes  of  grain  from  the  elevator,  the  receipts  for  which 
had  never  been  cancelled  by  the  registrar.  This  fact  being  made 
known  to  Mr.  Clary  he  informed  Colonel  Hough  that  the  firm  would 
be  indicted  by  the  grand  jury  upon  his  sworn  testimony,  unless 
they  should  at  once  procure  receipts.  Colonel  Hough  promised  to 
furnish  the  receipts,  and  pleaded  in  extenuation  that  the  shipment 
was  made  to  relieve  the  pressure,  as  a  great  amount  of  grain  was 
being  held  in  the  country  on  account  of  lack  of  storage  in  Chicago. 
On  October  2  Colonel  Hough  appeared  with  a  bundle  of  receipts 
purporting  to  represent  the  cargoes  of  three  canal  boats,  and  they 
were  cancelled  and  registered  in  due  form  by  Mr.  Clary  under  the 
supposition  that  the  firm  had  bought  three  boat  loads  of  grain  then 
afloat  in  the  river.  On  the  following  day  one  of  the  younger  Houghs 
left  two  receipts  at  Clary's  office  to  be  cancelled,  which  he  said  rep- 
resented the  two  cargoes  that  had  been  shipped  in  September. 
These  receipts  were  also  cancelled.  None  of  these  cargoes  were 
reported  to  the  local  inspector  as  having  been  received  into  the 
elevator.  Five  cargoes  had  never  gone  into  store,  but  had  been 
transferred  from  canal  boats  to  lake  vessels.  The  publication  of 
the  above  account  by  the  Chicago  "Tribune"  caused  great  excite- 
ment on  'Change,  which  was  increased  by  the  report  that  an 
operator  had  accepted  receipts  which  he  found  upon  examination 
had  already  been  faintly  cancelled  on  the  corner.  It  was  impossible 
for  the  Board  of  Trade  to  overlook  these  charges,  and  at  the  request 
of  the  Houghs  a  committee  consisting  of  A.  M.  Wright,  Robert 
Warren  and  Howard  Priestly  was  appointed  to  investigate.  This 
committee  did  its  work  thoroughly  and  took  a  large  amount  of 
testimony,  some  of  which  was  published  in  the  daily  press  and  all 
of  which  was  printed  in  pamphlet  form  for  the  benefit  of  the  mem- 
bers. This  testimony  was  highly  sensational  and  showed  that  the 
evil  was  not  confined  to  the  Hough  elevator,  but  that  other  ware- 
housemen were  guilty  of  practically  the  same  ofifense,  having 
shipped  grain  without  the  cancellation  of  receipts.  Registrar  Clary 
testified  that  three  per  cent  of  the  railroad  receipts  were  not  regis- 


488,  HISTORY  OF  THE  BOARD  OF  TRADE  X1873] 

tered,  although  put  upon  the  market.  Murry  Nelson  and  others 
admitted  that  they  were  behindhand  in  producing  receipts  for  can- 
cellation, and  it  was  stated  that  Mr.  Nelson  shipped  grain  Septem- 
ber 17  for  which  he  did  not  produce  receipts  until  October  6.  A 
large  part  of  these  violations  of  the  law  grew  out  of  the  issuance 
of  "split  receipts."  The  committee  brought  out  the  facts  in  its 
report  and  recommended  a  much  stricter  enforcement  of  the  law 
in  regard  to  registration  and  cancellation,  and  censured  both  the 
warehousemen  and  the  registrar.  The  committee  also  recommended 
the  passage  of  a  resolution  to  read:  "If  any  public  warehouseman 
be  detected  in  loaning  or  shipping  any  grain  not  his  own,  the  ware- 
house receipts  of  such  warehouseman  shall,  thereupon,  be  declared 
and  treated  as  irregular,  and  an  insufficient  tender  in  the  fulfillment 
of  contracts  between  members  of  this  Board." 

The  committee  added :  "Public  opinion  must  no  longer  be 
misled,  and  familiarity  with  past  unauthorized  shipments  must  in 
no  way  be  allowed  to  dull  the  public  sense  as  to  the  true  nature  and 
tendency  of  such  ofifenses.  In  every  instance  of  such  liberties  it 
must  be  borne  in  mind  it  is  a  breach  of  trust  and  a  crime  punish- 
able by  penal  inflictions.  If,  in  the  course  of  events,  it  should 
appear  in  this  respect  that  public  law  and  public  honesty  can  in  no 
other  manner  be  enforced,  then  we  should  say  it  would  be  high 
time  that  some  such  law-breaker  should  be  made  to  experience  the 
penalty  of  that  law." 

In  his  testimony  before  the  committee  Registrar  Clary  declared 
that  registration  was  of  no  value  for  the  prevention  of  frauds,  but 
might  lead  to  their  detection.  He  stated  that  all  the  information 
of  the  registrar's  office  was  obtained  from  the  books  kept  by  the 
warehousemen,  that  all  the  elevators  delivered  grain  without  the 
receipts  and  that  the  cancellation  of  receipts  was  frequently  in  long 
arrears  of  the  shipments.  He  declared  that  he  had  no  understand- 
ing with  Hough,  and  that  he  had  done  his  best  to  enforce  the  law, 
but  that  the  warehousemen  appeared  not  to  care  a  fig  about  the  law, 
although  they  did   care   a   great   deal   about   newspaper  publicity. 

The  Board  of  Trade  accepted  the  report  of  the  committee,  and 
the  resolutions,  passed  November  26,  emphatically  condemned  the 
practice  of  warehousemen  in  lending  grain  and  delivering  grain 
without  the  return  and  cancellation  of  receipts  therefor,  as  dan- 
gerous and  injurious  to  the  value  of  receipts  as  security;  as  not 
demanded  by  any  necessity  of  legitimate  trade,  and  as  calculated 
to  impair  confidence  in  the  transactions  of  the  Board.  It  also 
requested  all  proprietors  of  warehouses  to  fully  comply  with  the 
laws  in  regard  to  inspection  and  warehousing  of  grain  and  thereby 
secure  the  integrity  of  warehouse  receipts.  It  called  upon  the 
officers  of  the  state  to  enforce  the  laws  vigorously  and  to  take  meas- 
ures to  secure  a  daily  report  of  shipments.  Elevator  managers  were 
requested  not  to  issue  "split"  receipts  without  first  cancelling  the 


[1873]  OF  THE  CITY  OF  CHICAGO  489 

original.  The  action  fully  sustained  the  report  made  by  the  special 
committee  and  was  held  to  be  a  proper  protest  against  the  long- 
continued  abuse  which  was  greatly  calculated  to  injure  the  char- 
acter of  the  grain  trade. 

During  December  the  Board  of  Directors  considered  the  propo- 
sition of  asking  the  warehousemen  to  give  bond  for  the  redemption 
of  receipts.  Some  of  the  warehousemen  agreed  to  this,  although 
it  was  understood  that  the  Board  could  not  force  them  to  do  so,  but 
it  could  refuse  to  accept  their  receipts  as  regular,  unless  bond  was 
given.  This  scandal  brought  about  much  discussion  and  developed 
sentiment  for  a  return  to  the  old  system  of  inspection  by  the  Board 
of  Trade.  As  a  partial  corrective  Registrar  Tyndale  announced, 
on  December  17,  that  he  would  post  on  the  bulletin  board  of  the 
Exchange  all  shipments  of  grain  for  which  receipts  had  not  been 
cancelled.  On  December  20  the  Board  passed  the  following: 
"Resolved,  That  inasmuch  as  the  official  reports  of  the  Chief 
Inspector  of  Grain  and  the  Warehouse  Registrar  show  a  large  per- 
centage of  deficit  in  the  amount  of  corn  in  the  Chicago  &  Alton 
Elevator,  as  compared  with  the  outstanding  receipts  for  the  same, 
it  is  hereby  declared  that  no  warehouse  receipts  for  grain  in  said 
elevator  shall  hereafter,  until  further  action  by  the  Board,  be  con- 
sidered a  proper  tender  on  sale  or  contracts  for  grain."  It  was  said 
that  the  Houghs'  had  purchased  5.000  bushels  of  corn  to  make  up 
their  shortage,  but  still  lacked  15,000  bushels;  they  were  given  until 
noon  to  make  up  this  deficit  but,  as  no  new  purchase  was  reported, 
the  resolution  as  given  above  was  passed. 

During  the  month  of  October,  1873,  two  important  meetings 
were  held  in  Chicago.  On  the  21st  convened  the  sixth  annual  meet- 
ing of  the  National  Board  of  Trade  at  Kingsbury  Music  Hall,  with 
President  Fraley  in  the  chair  and  Charles  Randolph  of  Chicago 
as  Secretary.  The  Chicago  delegates  were  C.  E.  Culver,  A.  M. 
Wright,  G.  M.  How,  N.  K.  Fairbanks,  W.  E.  Doggett,  E.  W.  Blatch- 
ford  and  J.  C.  Dore.  Mr.  Fraley  was  re-elected  President  for  a 
sixth  term  and  C.  E.  Culver  of  Chicago  was  elected  as  one  of  the 
Vice-Presidents.  The  report  of  the  Executive  Council  favored, 
among  other  things,  penal  laws  to  prevent  the  issuance  of  fraudu- 
lent warehouse  receipts  and  to  protect  the  holders  of  such  receipts. 
The  Board  adopted  resolutions  favoring  uniform  bankruptcy  laws, 
the  abolition  of  the  fee  system,  and  the  substitution  of  fixed  salaries, 
a  National  Department  of  Commerce,  better  laws  in  regard  to  taxa- 
tion and  assessment  and  went  on  record  as  opposing  ship  subsidies. 
Much  attention  was  also  given  the  transportation  question,  and  a 
resolution  was  passed  urging  a  treaty  with  Great  Britain  to  modify 
trade  relations  with  Canada,  and  to  obtain  the  use  of  Canadian 
canals  for  Americans  on  the  same  terms  as  Canadians.  The  meet- 
ing closed  with  a  banquet  at  the  Chamber  of  Commerce  Hall,  among- 
the  speakers  being  President  C.  E.  Culver,  of  the  Board  of  Trade 


490  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

of  the  city  of  Chicago;  Governor  Beveridge  of  IlHnois;  Hon.  F. 
Fraley,  President  of  the  National  Board ;  Thomas  White  of  the 
Dominion  Board,  ex-Governor  McGoffin  of  Kentucky,  Secretary 
Randolph  and  others.  The  National  Board  adjourned  October  25 
to  meet  in  January,  1874,  in  Baltimore.  During  the  sessions  of  the 
National  Board  of  Trade,  Chicago  was  also  the  scene  of  a  large  con- 
vention of  the  farmers  of  Illinois.  They  had  interesting  sessions 
and  passed  among  others  the  following  resolution :  "We  demand 
the  construction  of  railways  and  the  improvements  of  water  com- 
munication between  the  interior  and  the  seaboard,  the  same  to  be 
owned  and  operated  by  the  general  government  for  the  purpose  of 
affording  cheap  and  ample  transportation,  and  to  protect  the  people 
from  the  exactments  of  monopolies." 

While  the  panic  cuased  a  depression  in  produce  prices  it  gave 
a  decided  impetus  to  the  packing  industry,  as  Chicago  alone  had 
sufficient  money  to  carry  on  the  business.  The  receipts  of  hogs 
for  November  26  were  46,000  head,  this  being  the  largest  number 
ever  received  in  Chicago  in  one  day  up  to  that  time.  In  December 
Chief  Grain  Inspector  Harper  issued  his  annual  report,  showing 
that  a  surplus,  Dec.  2,  1872,  of  $16,938.95,  had  been  changed,  by 
September  1,  1873,  to  a  deficit  of  $1,874.08.  He  explained  this  deficit 
by  stating  that  there  were  two  new  railroads  with  six  new  elevators, 
which  largely  increased  the  expense,  without  a  corresponding 
increase  of  income,  and  also  that  there  were  $15,000  outstanding 
in  delinquent  fees.  Nevertheless,  he  claimed  that  the  state  inspec- 
tion was  growing  in  favor.  He  also  recounted  the  acts  of  the  Com- 
mittee on  Appeals,  authorized  by  the  new  law  which  went  into 
effect  July  1,  1873.  The  first  members  of  this  committee  were 
John  R.  Bensley,  John  P.  Reynolds  and  H.  C.  Ranney,  the  latter 
resigning  in  September,  and  being  succeeded  by  T.  T.  Gurney.  The 
claim  that  state  inspection  was  finding  increased  favor  seemed  to 
have  been  belied  by  the  fact  that,  on  December  10,  the  inspector 
gave  notice  that  he  would  prosecute  men  employed  to  examine 
(not  inspect)  grain.  The  shippers  defended  this  employment  of  pri- 
vate examiners,  and  gave  as  an  instance  that,  in  October,  Erastus 
Corning  ordered  four  cargoes  of  oats,  and  the  grain  attempted  to 
be  delivered  was  one-fourth  corn.  The  state  inspector  made  no 
objections,  and  it  was  only  when  the  agent  of  the  shipper  inter- 
posed that  the  bin  was  shut  off  and  the  vessel  loaded  with  real  oats. 
At  the  close  of  the  year  acting  Registrar  T.  H.  Tyndale  sent  a 
circular  to  the  warehousemen  calling  attention  to  the  law  and 
asking  that  all  orders  issued  for  grain  to  be  delivered  from  any 
warehouse  owned  or  managed  by  them  be  made  to  correspond  in 
every  particular  with  the  receipts  upon  which  such  orders  were 
issued. 

The  year  1873  was  notable  for  the  passage  of  a  number  of  new 
rules  by  the  Board  of  Trade.    On  April  2  there  was  a  large  meet- 


[1873]  OF  THE  CITY  OF  CHICAGO  491 

ing  of  the  full  Board  and  important  changes  in  the  rules  were 
adopted,  as  follows: 

Section  9  of  Rule  5,  relating  to  charges  against,  and  suspension 
and  expulsion  of  members,  was  amended  and  approved  as  follows : 

It  shall  be  the  duty  of  the  Board  of  Directors  to  examine 
charges  of  misconduct  in  business  matters,  or  of  failure  to  perform 
any  business  obligation,  preferred  against  any  member  of  the  Asso- 
ciation, when  made  to  the  President  or  Secretary,  in  writing,  by  a 
member  of  the  Association  ;  and  if  it  shall  be  found  that  the  party 
so  charged  has  failed  to  equitably  adjust  or  comply  promptly  with 
the  terms  of  any  business  obligation  or  contract,  either  written  or 
verbal,  or  has  failed  to  comply  with  and  fulfill  any  award  of  the 
Committee  of  Arbitration  or  Committee  of  Appeals,  made  in  con- 
formity with  the  rules  of  the  Association,  he  shall  be  by  them  sus- 
pended from  all  privileges  of  membership  in  the  Association  until 
the  matter  complained  of  has  been  equitably  or  satisfactorily 
arranged  or  settled,  when  he  may  be  restored  to  membership.  If 
the  party  charged  shall  be  found  guilty  of  a  violation  of  any  of  the 
rules  of  the  Association  of  making  false  or  fictitious  reports  of 
sales  or  purchases,  of  any  act  of  dishonesty,  or  any  other  act  con- 
trary to  the  principles  which  should  govern  all  commercial  trans- 
actions, they  shall  report  the  same  to  the  Association,  either  at  the 
regular  annual  meeting  or  at  a  meeting  called  for  that  purpose,  and 
the  member  shall  be  expelled  if  so  determined  by  a  majority  of  the 
members  present  being  not  less  than  one  hundred.  No  member, 
however,  shall  be  suspended  or  expelled  without  having  an  oppor- 
tunity of  being  heard  in  his  own  defense,  and  any  member  having 
been  expelled  shall  be  ineligible  to  membership  until  the  Associa- 
tion sees  proper  to  remove  his  disability.  All  votes  on  expulsion 
of  members  shall  be  by  ballot. 

Suspension  for  Misconduct 

Section  10  of  Rule  5,  relating  to  the  suspension  of  members 
for  misconduct  of  a  personal  character,  was  amended  and  approved 
as  follows : 

They  shall  also  examine  charges  preferred  by  one  member 
against  another  for  improper  conduct  of  a  personal  character.  And 
if  the  party  charged  shall  be  found  guilty  of  conduct  in  the  rooms 
of  the  Board  that  is  derogatory  to  the  dignity  of  the  Association, 
and  his  duty  as  a  member  of  it,  he  may  be  suspended  from  all  privi- 
leges of  membership  in  the  Association  for  such  time  as  the  Board 
of  Directors  may  determine.  It  shall  be  the  duty  of  the  Board  of 
Directors  to  cause  the  proper  notice  to  be  given  to  any  member 
of  his  suspension,  expulsion  or  restoration  under  this  and  the  pre- 
ceding section,  and  to  cause  the  same  to  be  publicly  announced 
on  'Change,  except  in  cases  of  suspension  for  non-fulfillment  of  con- 
tract where,  prior  to  the  time  at  which  such  announcement  should 
be  made,  the  Secretary  has  been  advised  by  the  complainant  in  the 
case  that  the  matter  complained  of  has  been  satisfactorily  adjusted, 
in  which  case  the  suspension  shall  be  held  in  abeyance  until  the 
next  meeting  of  the  Board  of  Directors. 


492  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

Section  11  of  Rule  5  approved  follows: 

In  case  any  member  shall  fail  to  comply  promptly  with  the 
terms  of  any  business  contract,  by  reason  of  his  financial  inability 
to  fulfill  the  same,  he  shall  upon  the  representation  of  the  facts  to 
the  President  by  an  aggrieved  member,  and  the  acknowledgment  by 
the  party  of  the  truth  of  charge,  or  on  proof  of  the  fact  to  the  Board 
of  Directors  be,  by  that  act,  suspended  from  all  privileges  of  the 
Association,  until  all  his  outstanding  obligations  with  members  of 
the  Association  are  adjusted  and  settled,  and  shall  only  be  read- 
mitted to  the  floor  of  the  Exchange  upon  the  presentation  of  satis- 
factory evidence  to  the  Board  of  Directors  that  all  just  claims 
against  him  by  members  of  the  Association  are  settled,  and  if 
deemed  necessary  by  the  Board  of  Directors,  a  notice  of  his  applica- 
tion for  restoration  may  be  posted  on  the  bulletin  of  the  Exchange 
for  one  week  prior  to  their  decision  as  to  his  readmission,  and,  in 
case  no  objections  are  made,  it  shall  thereafter  be  assumed  that  all 
claims  against  him  have  been  settled,  and  no  claims  resulting  from 
transactions  of  a  prior  date  shall  thereafter  be  entertained  by  the 
Board. 

Section  12  was  amended  as  follows  : 

When  a  member,  against  whom  there  are  pending  no  com- 
plaints or  charges  preferred  by  a  member  of  the  Association,  or  who 
is  not  under  sentence  of  suspension  of  expulsion,  shall  have  been 
duly  discharged  from  his  legal  responsibilities  or  debts  by  a  Court 
of  Bankruptcy,  he  shall  not  thereafter  be  held  liable  by  the  Board 
on  account  of  such  obligations. 

The  Secretary's  Report 

Sections  1  of  Rule  6,  relating  to  the  duties  of  the  Secretary, 
was  so  amended  as  to  release  that  officer  from  the  necessity  of 
including  in  his  annual  report  the  usual  elaborate  and  expensive 
compendium  of  the  provision  trade. 

Weight  of  Boxed  Meats 

The  following  substitute  for  Section  17,  Rule  IS,  relating  to  the 
weight  of  boxed  meats,  was  adopted  : 

"The  standard  net  weight  of  meats  packed  in  boxes  shall  be 
between  400  and  485  pounds  for  each  box,  and  in  all  settlements  or 
deliveries  of  boxed  meats  an  average  of  450  pounds  per  box  shall  be 
the  basis  for  settlement,  and  the  excess  or  shortage  from  said  aver- 
age shall  be  settled  at  the  market  value  of  the  property  delivered 
at  the  time  of  its  delivery.  But  in  case  of  delivery,  the  full  number 
of  packages  contracted  for  must  be  delivered." 

New  Members 

Section  1  of  Rule  7  was  amended  so  as  to  read : 
"Any  person  approved  by  the  Board  of  Directors  may  become 
a  member  of  the  Association  by  signing  the  rules  and  regulations, 
paying  the  initiation  fee  and  the  annual  assessment.  The  initia- 
tion fee  July  1,  1873,  shall  be  $100,  and  thereafter  $250.  Provided, 
that  no  person  shall  be  approved  by  the  Board  of  Directors  as  a 


[1873]  OF  THE  CITY  OF  CHICAGO  493 

member  of  the  Association  who  is  not  a  resident  of,  or  permanently 
doing  business  in,  the  city  of  Chicago." 

Withdrawals  and  Deceased  Members 

To  Section  3  of  Rule  17,  relating  to  withdrawals,  deceased 
members,  and  the  appropriation  of  funds,  the  following  clause  was 
added,  and  the  rule,  as  amended,  was  approved : 

"Applications  for  withdrawals  shall  be  made  and  posted  on 
the  bulletin  of  the  Exchange  for  at  least  ten  days  before  any  pay- 
ment shall  be  made,  and  in  case  objection  is  made,  the  party  shall 
be  permitted  to  withdraw  only  by  consent  of  the  Board  of  Directors. 
No  funds  of  the  Association  shall  be  appropriated  either  by  the 
Board  of  Directors,  or  by  the  body  at  large,  except  in  cases  where 
such  appropriation  will  strictly  promote  the  commercial  interests 
of  the  Association." 

Clerks  Tickets 

Section  4  of  Rule  17,  relating  to  clerks'  tickets,  was  amended 
as  follows : 

"Each  firm  or  business  house,  all  the  resident  members  of  which 
are  members  of  the  Board  of  Trade,  shall  be  entitled  to  one  or  more 
clerks'  tickets  of  admission  to  the  Exchange  rooms,  by  the  payment 
of  the  current  annual  assessment  of  members,  such  clerk  to  be  a 
regular  employe  of  the  firm  applying  for  the  ticket,  and  to  be 
approved  by  the  Board  of  Directors ;  but  no  clerk  shall  be  entitled 
to  transact  any  business  on  the  floor  of  the  Exchange  rooms,  for 
himself,  or  for  any  other  person  than  the  employer  to  whom  the 
ticket  is  issued." 

Responsibility  of  Brokers 

Section  5  of  Rule  17,  relating  to  responsibility  of  brokers,  was 
amended  as  follows : 

"Any  person  claiming  to  act  as  a  broker  shall  be  required  to 
report  the  name  of  his  principal  at  the  time  of  making  any  purchase 
or  sale,  or  failing  to  do  so,  shall  thereafter  be  held  responsible  for 
such  trade,  at  the  option  of  the  party  with  whom  he  shall  have  made 
the  same." 

The  year  1873  was  notable  also  for  what  were  said  to  be  the 
first  shipments  of  live  stock  to  Europe  for  butchering  purposes. 
The  New  York  "Evening  Post"  of  September  24,  1873,  contained  an 
interview  with  Mr.  Henry  Bell  of  Glasgow,  Scotland,  concerning 
these  shipments.  Mr.  Bell  represented  the  Glasgow  firm  of  John 
Bell  &  Sons,  large  wholesale  butchers,  which  supplied  the  Anchor 
Line  of  steamships  with  fresh  meats.  Mr.  Bell  said  that  on 
account  of  the  many  restrictions  on  the  importation  of  cattle  from 
the  continent,  due  to  the  "rinderpest"  and  other  diseases,  and  the 
high  price  of  Scottish  cattle,  his  firm  had  experimented  with  ship- 
ments of  live  beef  cattle  from  America.  The  first  shipment  of  six 
head  was  made  in  July,  1873,  and  was  so  satisfactory  that  Mr. 
Henry  Bell  had  been  sent  to  America  to  make  a  regular  business 
of  these   shipments.     Twelve   head   were   being   shipped   on   each 


494  HISTORY  OF  THE  BOARD  OF  TRAD|;  [18731 

Anchor  Line  ship,  and  it  was  proposed  to  increase  the  number  to 
^'twenty.  T4ie  first  shipments  were  made  on  the  upper  deck  in  open 
stalls  and  the  cattle  were  placed  in  the  care  of  one  of  the  ship's 
stewards,  although  if  larger  shipments  were  made  it  was  proposed 
to  employ  a  special  attendant.  Mr.  Bell  stated  that  the  cattle 
arrived  in  fair  condition,  losing  not  more  than  an  average  of  fifty 
pounds  on  the  voyage.  The  first  lot  of  twelve,  shipped  on  the 
"California,"  was  unfortunate  on  account  of  a  severe  storm  off  Nova 
Scotia.  Four  were  washed  overboard  and  the  others  were  badly 
bruised.  This  showed  the  necessity  of  shipping  the  cattle  between 
decks,  which  Mr.  Bell  regretted,  as  it  would  be  necessary  to  hoist 
the  cattle.  Illinois  cattle  were  purchased  for  shipment,  at  an  aver- 
age cost  of  $100  per  head,  the  cost  of  transportation  was  about  $75, 
making  the  cost,  in  Glasgow,  $175,  whereas  Scotch  cattle  of  the 
same  grade  sold  for  $190,  giving  the  importers  a  profit  of  $15.  Mr. 
Bell  thought  any  attempt  to  supply  the  London  market  in  this 
way  would  be  a  failure  on  account  of  the  cost  of  transportation 
from  Liverpool  to  that  city,  but  he  thought  the  Liverpool  market 
might  be  supplied  with  a  profit.  He  did  not,  however,  think  ship- 
ments of  live  stock  from  America  to  the  British  markets  would 
ever  become  a  permanent  feature  of  the  trade,  as  German  cattle, 
when  quarantine  restrictions  were  removed,  could  be  sold  in  Eng- 
land for  about  $30. 

The  produce  trade  of  1873  exhibited  an  increase  greater  than 
that  of  any  previous  year.  The  breadstufifs  movement  was  con- 
siderably larger,  while  in  live  stock  the  gain  was  unprecedented.  In 
both  departments  this  one  great  fact  was  observable,  the  volume  of 
trade  was  limited  only  by  the  ability  to  handle  the  produce  and 
get  rid  of  it.  There  was  a  noteworthy  preference  for  Chicago  on 
the  part  of  eastern  and  European  buyers,  especially  in  provisions 
and  an  equally  growing  preference  on  the  part  of  country  owners 
to  send  their  property  to  Chicago  instead  of  to  other  places.  The 
reason  for  this  was  that  Chicago  was  a  genuine  market.  The  mar- 
Tcets  were  all  open  ones,  and  parties  desiring  either  to  buy  or  to  sell 
could  always  ascertain  to  a  hair's  breadth  how  much  they  could  get 
for  their  property,  or  how  much  it  would  cost  them.  The  markets 
were  of  such  magnitude  that  large  lots  could  be  offered  for  sale 
without  depressing  them,  and  large  purchases  made  without  caus- 
ing an  upward  movement  against  the  buyer  before  he  got  through 
with  his  trade.  There  was  money  enough  and  produce  enough  to 
meet  the  requirement  of  both  classes.  Neither  a  fire  nor  a  panic 
could  interrupt  the  trade,  the  most  that  they  could  affect  being  a 
temporary  disturbance  of  prices,  which  was  soon  compensated  for 
by  natural  elasticity.  There  was  no  suspension  of  business,  like 
that  of  the  stock  board  of  New  York  or  the  Chamber  of  Commerce 
in  Milwaukee,  or  other  centers  like  St.  Louis  and  Cincinnati.  The 
attitude  of  Chicago,  in  both  these  trials,  would  have  astonished 


[1873]  OF  THE  CITY  OF  CHICAGO  495 

the  world  were  it  not  for  the  fact  that  the  world  outside  had  long- 
since  learned  to  expect  great  things  of  Chicago,  had  learned  that 
in  the  bright  lexicon  of  its  commercial  strength,  "there  was  no  such 
word  as  fail." 

Lake  freights  on  wheat  to  Buffalo  averaged  7.8  cents  per  bushel 
during  the  season,  against  11.1  cents  in  1872  and  7.8  cents  in  1871. 
The  rate  would  have  been  still  less  but  that  the  whole  average 
was  raised  considerably  by  a  combination  of  shippers  before  the 
opening  of  navigation,  which  made  the  opening  price  nearly  double 
the  average  of  the  season.  Corn  was  taken  at  16  cents  in  March  and 
4  cents  in  August. 

Wheat 

The  volume  of  trade  in  wheat  as  well  as  in  flour  exhibited  a 
large  increase  over  1872.  The  market  was  not  only  active  but 
unusually  steady.  The  range  in  1872  w'as  60  cents,  while  for  1873 
the  range  was  59  cents ;  fully  one-third  of  the  fluctuation  was  due 
to  the  panic  in  September.  The  year  was  singularly  free  from  cor- 
ners, and  all  the  more  singularly  as  stocks  were  down  to  a  very  low 
point  during  a  considerable  part  of  the  time,  which  invited  manipu- 
lation, and  comparatively  little  money  was  needed  to  carry  it  to 
a  successful  termination. 

Wheat  was  in  good  demand  throughout  for  shipment,  and 
more  largely  than  usual  on  direct  European  account.  The  wheat 
crop  of  1872  was  excellent  in  quality  and  quantity,  and  was  slightly 
exceeded  in  both  these  important  respects  by  that  of  1873,  while 
the  European  sources  of  British  and  French  supply  were  more 
deficient  than  usual.  Hence  a  continuous  demand  and  an  almost 
constant  margin  of  profit  on  shipments,  such  as  had  not  been  met 
with  for  many  years.  This,  too,  in  spite  of  the  other  unusual  facts 
that  cash  wheat  was  at  a  premium  over  the  current  sellers'  options 
almost  every  day  of  the  year.  The  bear  interest  was  large,  power- 
ful and  persistent.  It  hammered  away  with  all  its  might,  constantly 
prophesying  a  decline,  and  its  efforts  undoubtedly  were  the  means 
of  keeping  quotations  in  Liverpool  and  New  York  at  a  lower  figure 
than  would  have  ruled  but  for  them.  The  effect  of  this,  however, 
was  to  stimulate  consumption,  and  thus  ultimately  enlarge  the 
demand.  The  low  rates  of  the  lake  freights,  which  ruled  almost 
constantly,  also  aided  in  the  same  direction,  and  the  result  was 
that  the  farmers  had  a  good  steady  market  for  their  wheat  and 
generally  at  fair  prices,  though  they  did  not  realize  so  much  as  they 
would  have  done  but  for  the  panic  and  the  bears.  The  institution 
of  the  grade  of  Northwestern  wheat  drew  large  orders  from  mer- 
chants abroad,  who  formerly  dealt  altogether  in  Milwaukee.  It 
is  true  that  the  same  wheat  had  for  some  time  previously  been 
separated  from  the  rest,  and  designated  as  "hard,"  but  the  term 
"did  not  draw,"  possibly  because  it  called  up  mental  associations 


496  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

with  flint  and  rice  wheat.  The  new  grade  was  taken  freely  by- 
shippers,  and  would  have  been  bought  more  largely  had  the  supply 
been  greater  in  the  Northwestern  elevator.  It  had  commanded  a 
premium  of  J4  to  2  cents  per  bushel  more  than  the  "straight" 
wheat,  which  was  deliverable  on  contract,  and  in  New  York  and 
Liverpool  it  uniformly  sold  as  high  as  Milwaukee  wheat  of  the 
same  grade,  while  it  could  be  bought  for  considerably  less  on  the 
lake  shore  during  the  entire  season  of  navigation. 

The  average  of  prices  in  1873  would  have  been  about  the  same 
as  in  1872,  but  for  the  two  corners,  which  raised  the  average  of 
that  year,  and  the  panic  which  depressed  the  average  of  1873.  The 
market  for  cash  No.  2  spring  (straight)  opened  at  about  $1.20,  rose 
to  $1.26>4  by  the  end  of  January,  declined  to  $1.14  in  the  beginning 
of  April,  rose  to  $1.33^  in  May,  under  a  good  demand  with  lower 
freights  than  had  been  expected,  declined  to  $1.14J4  in  July,  as 
buyers  held  off  to  see  how  low  the  bears  would  force  prices,  and 
New  York  tumbled  from  $1.60  to  $1.45;  rose  to  $1.40  at  the  close 
of  the  month,  under  a  squeeze  which  was  dignified  by  the  name  of 
the  "Montreal  corner,"  and  then  declined  almost  steadily  to  $1.07% 
in  the  middle  of  September.  Then  came  the  panic,  and  a  heavy 
surge  of  wheat  collaterals,  with  a  scarcity  of  currency,  which  broke 
down  the  market  to  89  cents.  There  was  a  quick  rebound  to  $1.09^ 
in  the  early  part  of  October,  and  another  drop  to  98  cents  later  in 
the  month,  as  money  became  scarcer  and  orders  fewer.  Eastern 
buyers  having  been  well  filled  up  in  the  four  weeks  succeeding  the 
panic.  The  first  week  in  November  the  market  further  receded  to 
92j4  cents,  but  advanced  to  $1.09^  by  the  end  of  the  month,  under 
a  good  demand  for  shipment  and  light  receipts,  which  reduced 
stocks  of  all  grades  to  but  a  little  over  300,000  bushels.  By  the 
middle  of  December  the  market  had  advanced  to  $1.1654,  then 
declined  to  $1.08%,  rose  to  $1.16%  and  closed  on  the  27th  of 
December  at  $1.14%. 

Corn 

The  corn  market  for  the  year  was  a  continued  anomally.  With 
a  bountiful  crop  the  receipts  of  1872  were  the  largest  ever  known. 
Prices  declined  materially,  the  average  of  1872  being  about  38% 
cents  per  bushel.  But  in  1873,  with  a  falling  off  to  the  extent  of 
about  20  per  cent  in  the  aggregate  volume  of  receipts  and  shipments, 
and  an  acknowledged  short  crop  to  supply  the  demand  of  1874, 
which  shortage  was  known  early  in  the  year,  prices  ruled  even 
lower  than  on  the  plentiful  supply  of  1872.  The  market  for  No.  2 
corn  opened  at  about  30%  cents,  declined  to  30  cents  in  the  latter 
part  of  January,  rose  to  33ys  cents  in  the  middle  of  March,  receded 
to  30%  cents  at  the  end  of  the  month,  advanced  to  42%  cents  in 
the  middle  of  May,  under  the  fact  of  continuous  bad  weather  for 
planting;    declined    to    37%    cents    a    few    days    later   with    better 


[1873]  OF  THE  CITY  OF  CHICAGO  497 

weather;  rose  to  40J/2  cents  at  the  close  of  May,  as  the  area  planted 
up  to  that  time  was  found  to  be  smaller  than  usual ;  fell  to  29  cents 
the  end  of  June,  owing  to  the  posting  of  some  corn  as  "hot,"  and 
the  fear  that  most  of  it  was  out  of  condition,  recovered  to  36J/2  cents 
the  first  week  in  July,  and  then  ranged  between  35  and  38^  cents 
till  the  middle  of  August,  when  the  fact  of  a  short  crop  began  to 
tell,  and  the  price  rose  to  43^4  cents  in  the  middle  of  September. 
Then  came  the  panic,  which  sent  the  market  down  to  33  cents,  from 
which  point  it  rose  to  39}i  cents  in  the  early  part  of  October;  went 
down  to  33  cents  the  first  week  in  November,  under  the  prevalent 
financial  stringency,  as  the  demand  from  New  England  after  the 
•panic  had  fallen  off  and  advanced  to  47 J4  cents  by  the  end  of  the 
month,  owing  to  the  fact  of  very  small  receipts  on  the  light  stock  in 
store.  The  market  then  fell  off  to  44^  cents  and  advanced  sharply 
to  53%  cents,  receded  to  51^  cents  and  closed  the  27th  of  Decem- 
ber about  53j4  cents. 

Oats 

The  receipts  of  oats  were  considerably  larger  than  in  1872,  not- 
withstanding the  fact  that  the  corner  in  June  of  that  year  brought 
hither  all  the  oats  that  could  be  sent  in  from  a  tract  of  country 
much  larger  in  area  than  that  from  which  this  market  usually  drew 
its  supply.  The  corner  ran  the  price  up  to  43^4  cents,  but  the  aver- 
age price  of  the  year  was  but  about  29^  cents.  The  average  of 
1873  was  considerably  less  than  this.  The  market  opened  at  24J/^ 
cents;  rose  to  27  cents  the  first  week  in  February;  declined  to  25% 
cents  by  the  end  of  the  month ;  advanced  to  27  cents  in  March ;  fell 
back  to  23%  cents  the  first  week  in  April;  rose  to  33 J4  cents  about 
the  middle  of  May ;  fell  to  25%  cents  the  middle  of  June ;  rose  to  30 
cents  in  the  beginning  of  July  ;  receded  to  lOyi  cents  in  August ;  sold 
up  to  30%  cents  just  before  the  panic  ;  dropped  to  26  cents  toward 
the  close  of  September;  advanced  to  33^  cents  in  the  first  half  of 
October;  fell  to  26}^  cents  the  first  week  in  November,  and  then 
advanced,  rather  irregularly,  to  AOyi  cents  in  the  second  week  in 
December,  and  closed  on  the  27th  of  December  at  37}4  cents. 

Rye 

The  volume  of  trade  in  rye  was  about  the  same  as  in  1872,  but 
was  not  much  more  than  one-half  that  of  1871.  Stocks  were  well 
kept  down  through  the  year.  The  new  crop  was  of  good  quality, 
and  averaged  98  per  cent  of  the  1872  crop  in  quantity,  but  was 
fully  two  weeks  late  in  maturing,  owing  to  the  unfavorable  weather 
of  the  first  half  of  the  year.  Trade  was  moderate  during  that  period, 
but  prices  were  well  maintained,  the  lowest  point  touched  (in  July) 
being  56  cents  for  No.  2.  In  August  a  very  good  demand  sprang 
up  from  New  York  on  European  account,  the  intention  being  to 
export  fully  250,000  bushels  to  Germany,  where  the  crop  was  very 


498  HISTORY  OF  THE  BOARD  OF  TRADE  [1873] 

short.  The  panic  interfered  somewhat  with  this  process,  but  the 
movement  was  resumed  soon  after  the  breakdown,  which  only 
caused  a  decline  of  9  cents  per  bushel.  The  market  for  No.  2  opened 
at  65^  and  66  cents  and  ranged  up  to  68^^  cents  at  the  end  of 
January;  down  to  63  cents  at  the  end  of  February;  up  to  66  cents 
in  March ;  down  to  61  cents  the  early  part  of  April;  up  to  68  and  70 
cents  during  May ;  down  to  65  cents  in  the  middle  of  July ;  up  to  69 
cents  just  before  the  panic  ;  then  fell  to  60  cents ;  went  up  to  65  cents 
in  October  and  down  to  58  cents  the  first  week  in  November ;  then 
advanced  to  81  cents  the  first  half  of  December,  and  fell  back  to  75 
cents,  closing  firm  at  77  cents  for  carloads  on  two  cents  storage. 
The  entire  range  was  56@81  cents. 

Barley 

Barley  ruled  higher  than  in  1872,  but  not  uniformly  so,  for 
the  market  was  exceedingly  irregular.  The  receipts  were  nearly 
equal  in  volume  to  those  of  1871,  but  much  less  than  in  1872,  when 
the  trade  was  unusually  large.  The  market  ruled  rather  low  dur- 
ing the  first  half  of  the  year,  touching  its  lowest  point,  50  cents  for 
No.  2,  in  June,  under  the  expectation  of  a  large  crop  and  a  small 
city  demand,  as  the  malting  capacity  destroyed  by  the  fire  had  been 
only  partially  renewed.  But  the  low  price  of  barley  in  1872  dis- 
couraged many  from  growing  it,  and  many  of  the  northern  districts 
in  Minnesota,  Wisconsin  and  some  parts  of  Iowa  did  not  raise 
mucli ;  that  general  average  of  quantity  was  estimated  by  the  agri- 
cultural bureau  at  8?  per  cent,  or  a  falling  ofif  of  one-eighth.  The 
market  for  No.  2  opened  at  about  65  cents,  rose  to  83  cents  near  the 
close  of  January ;  declined  to  66  cents  the  first  week  in  February ; 
rose  to  81  cents  the  last  half  of  March ;  fell  to  68^/^  cents  the  second 
week  in  April;  advanced  to  83  cents  early  in  May,  and  receded  to 
50  cents  in  June;  rose  to  $1.50  near  the  middle  of  August;  fell  to 
$1.08;  rebounded  to  $1.40  just  before  the  panic,  under  which  it 
tumbled  to  $1;  rose  to  $1.36  early  in  October;  went  back  to  $1.17 
the  first  week  in  November  and  jumped  to  $1.58  early  in  December, 
under  a  settlement  squeeze;  then  declined  to  $1.32  and  re-advanced 
to  $1.42,  closing  at  $1.38.  No.  3  ranged  comparatively  steady,  and 
closed  firm  under  a  fair  demand  at  $1.09  for  receipts  in  houses  in 
which  the  grain  was  satisfactory  to  buyers. 

Provisions 

During  the  first  three  months  of  1873  the  provision  trade  was 
generally  satisfactory.  The  market  had  been  somewhat  depressed 
earlier  in  the  winter,  and  this  called  out  a  good,  active  demand  for 
product  for  export.  The  trade  was  all  the  more  healthy,  as  the 
pork  corner  of  the  previous  year  had  caused  a  quantity  of  old  pork 
to  be  left  over,  which  discouraged  the  manufacture  of  pork,  and 
warned  the  packers  to  make  more  largely  of  "meats,"  which  much 


[1873]  OF  THE  CITY  OF  CHICAGO  499 

better  suited  the  market  of  Europe  and  the  South.  Being  put  in 
attractive  form,  the  product  was  taken  freely;  packers  made  fair 
profits,  while  the  brokers  who  represented  European  and  Southern 
buyers  did  a  good  business  to  their  own  pecuniary  benefit.  The 
speculative  demand  was  so  good  that  it  took  out  of  the  hands  of 
the  packers  by  the  close  of  the  season  most  of  the  product  which 
had  not  already  been  forwarded  to  points  where  it  was  distributed 
to  consumers.  During  the  summer  the  trade  was  good  and  profits 
so  satisfactory  as  to  induce  the  cutting  of  a  greater  number  of  hogs 
than  usual.  Prices  held  up  well.  Mess  pork  touched  $17.80  per 
barrel  in  the  latter  part  of  April  and  declined  to  $14.30  in  June, 
then  ranged  from  $15  to  $16.12j/  up  to  the  time  of  the  panic,  being 
steady  at  $16  through  the  first  half  of  September.  Meats  ruled  firm 
till  August,  then  declined,  chiefly  in  consequence  of  the  yellow 
fever  at  Memphis  and  Shreveport,  which  caused  a  widespread  fear 
that  it  would  become  epidemic  over  the  South,  and  materially  lessen 
their  ability  to  take  and  pay  for  meats.  Short  ribs  dropped  from 
9%  cents  in  the  first  half  of  August  to  8j^  cents  by  the  middle  of 
September.  Lard  ruled  comparatively  dull  and  steady,  being  taken 
only  as  wanted  for  consumption,  the  tremendous  losses  incurred 
by  handling  it  the  previous  year  having  made  speculators  afraid  to 
touch  it.  There  was  a  little  spurt  of  confidence  in  it  early  in  the 
summer,  but  the  packing  houses  began  to  turn  out  "summer  lard" 
in  such  quantities  as  to  weaken  confidence,  and  this,  in  turn,  soon 
put  a  check  on  the  production. 

The  panic  of  September  brought  pork  "down  by  the  run,"  as 
the  sailors  say.  From  $16  the  market  dropped  to  $13.50  by  the 
middle  of  October,  and  mess  pork  sold  as  low  as  $11  under  the 
"second  fever"  in  the  first  week  of  November.  The  greater  portion 
of  the  pork  sold  out,  under  the  panic  excitement,  changed  hands 
at  about  $14.  Lard  declined  from  83^  cents  in  September  to  6^ 
cents  early  in  November,  and  in  the  same  time  short  ribs  receded 
from  8j4  cents  to  5^  cents  for  boxed.  At  the  same  time  pork  sold 
at  $10.75  for  December  delivery  and  $10.90  for  January.  Cash  mess 
pork  advanced  to  about  $15  in  December,  but  weakened  to  $13.75  at 
the  close  of  the  year. 

Live  Stock 

Perhaps  in  no  branch  of  trade  did  the  season's  business  show  a 
more  pronounced  increase  than  in  the  department  of  live  stock. 
Aside  from  a  comparison  of  the  receipts  with  those  of  previous 
years  the  rapid  expansion  of  the  stock  business  was  in  no  way 
more  clearly  shown  than  by  the  increased  facilities  demanded  for 
its  accommodation.  Although  large  additions  to  the  capacity  of 
the  yards  were  made  during  the  seasons  of  1871  and  1872,  they  were 
found  inadequate  to  properly  accommodate  the  vast  business  of 
the  past  season,  and  during  the  summer  the  management  expended 


sou  HISTORY  OF  THE  BOARD  OF  TRADE  [1874] 

nearly  one  hundred  thousand  dollars  in  the  construction  of  addi- 
tional cattle  and  hog  pens,  and  in  providing  more  and  better  office 
room  to  meet  the  wants  of  the  steadily  increasing  number  of  com- 
mission men  and  shippers  engaged  in  business  at  the  "yards." 
Further  extensive  improvements  were  planned  for  the  ensuing  sea- 
son, among  them  the  completion  of  a  beautiful  park,  extending 
along  the  entire  front  of  the  "Exchange"  and  reaching  out  to  the 
main  alley  on  the  north. 

1874 

The  opening  of  the  year  1874  found  Chicago  and  the  country 
at  large  still  suffering  from  the  elTects  of  the  panic  of  the  fall  of  1873. 
There  had  been  a  marked  recovery  in  financial  circles,  but  the 
industrial  situation  was  bad,  and  the  army  of  the  unemployed  in 
Chicago  was  large ;  and  the  distribution  of  bread  was  the  daily  task 
of  the  relief  committee.  Except  for  the  great  depreciation  in  prices 
resultant  from  the  panic,  this  great  disaster  had  remarkably  little 
effect  upon  the  business  of  the  Board  of  Trade,  but  it  evidently  had 
its  effect  upon  the  speculating  spirit,  for  the  first  six  months  of  1874 
-were  practically  devoid  of  sensational  features  on  the  Board  of 
Trade.  At  the  annual  election  George  M.  How,  for  many  years  a 
leading  spirit  on  the  Board,  was  elected  President;  under  the  rule 
Howard  Priestley  became  First  Vice-President,  and  John  R.  Bens- 
ley  was  elected  Second  Vice-President.  The  new  directors  were 
William  Dickinson,  J.  B.  Hobbs,  A.  S.  Burt,  S.  D.  Foss  and  Alex- 
ander Geddes.  The  Directors  reported  that  the  receipts  for  1873 
were  $98,794  and  the  disbursements  $99,802.46,  the  cash  on  hand  was 
reduced  to  $193.16;  the  assets  of  the  Board,  however,  had  grown 
from  $79,672.50  to  $121,603.23.  The  membership  was  1,652,  an 
increase  during  the  year  of  298,  and  this  increase  included  a  large 
number  of  the  prominent  merchants  and  manufacturers  of  the  city, 
who  recognized  that  the  Board  of  Trade  was  more  than  a  mere 
commercial  body  and  had  become  a  large  factor  in  building  up  the 
interests  of  the  city  as  a  whole. 

The  National  Board  of  Trade,  which  had  met  in  Chicago  the 
previous  October,  held  a  session  at  Baltimore  on  January  14.  The 
National  Board  of  Trade  was  at  that  time  considered  a  most  impor- 
tant commercial  body,  and  as  one  of  the  official  mouthpieces  of  the 
business  world.  For  this  reason  its  pronouncements  were  deemed 
of  much  importance,  and  the  resolutions  passed  reflected  the  senti- 
ments of  the  leading  men  of  the  country  and  indicate  the  subjects 
which  were  uppermost  in  public  thought.  The  Chicago  represen- 
tatives took  an  active  part  in  these  deliberations,  and  one  of  the  first 
resolutions  passed  was  one  presented  by.  the  Chicago  Board  of 
Trade  asking  legislation  to  the  effect  that  persons  carrying  on  busi- 
ness under  a  firm  name  should  be  required  to  register  with  the 


[1874]  OF  THE  CITY  OF  CHICAGO  501 

county  clerk  or  some  other  officer  the  name  of  such  firm,  and  of 
each  individual  member  thereof.  With  the  financial  panic  still  in 
mind,  it  was  but  natural  that  the  currency  question  should  receive 
major  attention  at  the  hands  of  the  National  Board.  That  there 
was  wide  divergence  of  view  on  this  subject  is  illustrated  by  the 
fact  that  Mr.  J.  C.  Dore  of  Chicago  presented  one  of  the  strongest 
arguments  in  favor  of  increased  currency,  while  A.  M.  Wright, 
another  Chicago  representative,  was  the  champion  of  the  anti- 
inflation  idea.  The  majority  of  the  convention  was  opposed  to 
inflation,  and  the  resolutions  passed  urged  conservatism  and 
economy. 

The  status  of  the  law  in  regard  to  public  warehouses  was  fixed 
by  a  decision  of  the  Supreme  Court  of  Illinois  in  the  case  of  the 
People  vs.  Munn  &  Scott,  rendered  in  February,  1874.  This  decision 
upheld  the  constitutionality  of  the  law  of  1871,  and  the  warehouse- 
men, nominally  at  least,  were  obliged  to  obey  the  provisions  of  the 
law.  There  was  much  dissatisfaction  with  this  law  as  a  whole,  and 
many  attempts  were  made  to  secure  its  amendment.  The  Board  of 
Trade  desired  primarily  to  get  the  inspection  of  grain  back  into  its 
own  hands ;  failing  this,  however,  it  desired  to  divorce  the  inspec- 
tion service  from  politics  as  far  as  possible,  and  to  have  the  com- 
mission divided,  believing  that  both  the  railroads  and  the  grain 
trade  were  of  sufficient  importance  to  have  separate  commissions. 
The  warehousemen  finding  that  they  must  recognize  the  law  made 
a  strong  effort  to  have  the  storage  rates  increased,  but  their  efforts 
before  the  legislature  were  without  avail.  The  Grange  element  of 
the  state,  which  was  very  strong  and  which  had  never  been  in 
sympathy  with  the  Board  of  Trade  or  its  methods,  favored  the 
passage  of  a  law  declaring  all  transactions  in  "futures"  to  be  gam- 
bling operations.  The  proposed  law  read :  "Whoever  contracts 
for  the  sale  of  grain,  pork  in  barrels,  beef  in  barrels,  stock  of  any 
railroad  or  other  company,  or  gold,  for  future  delivery,  except  when 
the  seller  is  the  owner,  or  the  agent  of  the  owner  thereof,  and  in 
actual  possession  of  the  same,  shall  be  fined  not  exceeding  $1,000, 
confined  in  the  county  jail  not  exceeding  one  year,  and  all  such  con- 
tracts shall  be  considered  gambling  contracts  and  void ;  and  all 
money  paid  or  deposited  on  the  same  may  be  recovered  back,  as 
in  other  cases  of  gaming."  Very  naturally  the  Board  of  Trade  was 
strongly  opposed  to  this  measure,  J.  R.  Bensley  voicing  the  senti- 
ment when  he  said  in  an  interview:  "If  the  grain  was  shipped  in 
here  and  left  for  sale  to  only  those  men  who  would  come  forward 
and  buy  it  for  shipment  they  would  only  buy  when  it  had  accumu- 
lated here  to  such  an  extent  as  to  be  sold  cheap — at  their  own 
price.  As  it  is  now,  there  is  a  constant  market,  and  if  they  are  not 
ready  to  take  it  speculators  are,  and  they  keep  it  up  to  a  price  higher 
than  the  country  shippers  would  be  able  to  get  for  it,  except  in  rare 
instances  when  there  is  a  scarcity  or  competition  among  buyers  for 


502  HISTORY  OF  THE  BOARD  OF  TRADE  [1874] 

actual  consumption."  He  added  that  there  had  been  such  a  law, 
but  that  it  had  been  repealed.  The  agitation  resulted  in  the  passage 
of  the  following  law: 

"Whoever  contracts  to  have  or  give  to  himself  or  another  the 
option  to  sell  or  buy,  at  a  future  time,  any  grain,  or  other  com- 
modity, stock  of  any  railroad  or  other  company,  or  gold,  or  fore- 
stalls the  market  by  spreading  false  rumors  to  influence  the  price 
of  commodities  therein,  or  corners  the  market,  or  attempts  to  do 
so  in  relation  to  any  of  such  commodities,  shall  be  fined  not  less 
than  $10  nor  more  than  $1,000,  or  confined  in  the  county  jail  not 
exceeding  one  year,  or  both ;  and  all  contracts  made  in  violation  of 
this  section  shall  be  considered  gambling  contracts,  and  shall  be 
void." 

It  was  the  expectation  that  the  passage  of  this  law,  which  took 
effect  in  July,  1874,  would  be  effective  in  the  prevention  of  corners. 
The  opposite  was  true,  for  while  the  first  half  of  the  year  was  prac- 
tically free  from  these  operations,  there  was  almost  a  corner  a  month 
during  the  remainder  of  the  year. 

In  April,  Judge  Blodgett  rendered  a  decision  growing  out  of 
the  Chandler  oats  corner,  in  which  he  held  that  "puts"  were  simply 
gambling  contracts,  contrary  to  public  policy  and  with  no  standing 
in  the  courts.  This  was  followed,  in  July,  by  a  decision  by  Judge 
McRoberts  in  the  case  of  a  Mrs.  Coffing  vs.  Peironnet  et  al.,  grow- 
ing out  of  transactions  in  1871.  The  judge  held  that  the  new  law 
did  not  affect  this  case,  but  decided  that  the  transactions  were  in 
the  nature  of  gambling,  and  not  to  be  recognized  by  the  court,  for 
the  reason  that  there  seemed  to  be  neither  the  intent  nor  the  ability 
to  make  deliveries  of  the  grain  involved. 

There  were  numerous  complaints  concerning  the  inspection 
service,  and  in  February  E.  B.  Smith,  a  discharged  employee,  made 
serious  charges  against  Chief  Grain  Inspector  W.  H.  Harper,  alleg- 
ing that  funds  had  been  used  for  speculation  and  the  books  altered 
to  conceal  the  transaction.  The  State  Commissioners  made  a  hur- 
ried investigation  and  exonerated  Mr.  Harper.  Another  sensation 
during  the  spring  months  was  a  charge  made  by  George  Cowan 
that  the  packers  of  Chicago  were  guilty  of  packing  and  selling  sour 
or  tainted  meats.  This  charge,  at  first  anonymous,  was  received 
with  an  outburst  of  indignation  on  the  part  of  the  packing  interests, 
but  when  Mr.  Cowan  acknowledged  the  article  and  off^ered  to  sub- 
stantiate the  charges  the  matter  of  an  investigation  was  not  pressed. 
Baltimore  and  Philadelphia  merchants  insisted  that  Mr.  Cowan  was 
right,  and  in  March  in  the  case  of  McVeagh  &  Company  vs.  Thome 
&  Company,  a  verdict  for  $2,793,  the  full  amount  claimed,  was  ren- 
dered for  the  plaintiff  in  the  case  involving  the  sale  of  tainted  hams. 
While  this  exposure  undoubtedly  injured  the  standing  of  the  Chi- 
cago provision  trade  temporarily,  it  had  a  salutary  effect  upon  the 
packing  industry. 


[1874]  OF  THE  CITY  OF  CHICAGO  S03 

In  the  internal  economy  of  the  Board  there  was  much  differ- 
ence of  opinion  existing  between  the  grain  and  provision  traders 
relative  to  the  hours  of  trading  and  the  "call."  The  provision 
dealers  claimed  that  it  was  necessary  for  them  to  be  at  the  pack- 
ing houses  during  the  day,  and  they  demanded  longer  hours  of 
trading  and  a  "call"  not  only  on  provisions  but  on  grain.  These 
men  while  in  the  minority  were  large  and  influential  dealers.  For 
a  time  it  appeared  that  the  Board  might  be  disrupted  on  this 
account.  In  April  the  Directors  decided  on  a  "call"  for  provisions 
and  grain  at  4  p.  m.,  and  submitted  a  proposition  that  the  Board 
take  jurisdiction  in  complaints  arising  from  trading  under  this 
"call."  This  was  said  to  be  done  in  order  to  avert  secession  on  the 
part  of  the  provision  men.  This  proposition  was  twice  voted  down 
by  a  majority  of  the  Board  and  was  submitted  for  a  third  time  on 
May  1,  and  again  rejected.  Thirty  minutes  later  the  Secretary 
again  called  the  Board  to  order  and  announced  that  the  Directors 
had  decided  inasmuch  as  they  had  sole  charge  of  the  room  they 
would  extend  the  "call"  to  grain  in  spite  of  the  adverse  majority. 
This  action  was  deemed  arbitrary  Ijy  a  majority  of  the  members  and 
aroused  much  resentment.  In  a  few  days,  however,  a  compromise 
was  affected  by  making  the  call  an  hour  earlier,  from  3  to  4.  A 
very  important  rule  was  passed  in  May,  the  object  of  which  was 
to  prevent  hasty  and  ill-considered  amendments  in  future.  This 
was  introduced  by  H.  C.  Ranney,  and  was  in  effect  that :  motions 
to  alter,  amend  or  repeal  the  rules  or  any  part  thereof,  shall  not 
be  entertained  unless  proposed  by  at  least  ten  members.  Notice 
shall  be  posted  for  ten  days,  and  the  motion  then  be  subject  to  dis- 
cussion at  the  annual  or  a  special  meeting  of  the  Board.  The 
question  to  be  balloted  upon  a  week  after  such  meeting.  To  l)e 
adopted  the  measure  must  receive  a  majority,  and  not  less  than 
200  affirmative  votes.  This  rule  was  unanimously  adopted. 
During  June  there  was  expectation  of  a  corner  in  corn;  this  did 
not  materialize,  but  it  added  largely  to  the  receipts  of  the  month. 

The  month  of  July,  in  spite  of  the  new  law,  developed  two  full- 
fledged  corners.  The  corner  in  oats  was  credited  to  the  manipula- 
tion of  G.  W.  Adams,  and  was  said  to  have  been  one  of  the  cleverest 
and  most  complete  corners  ever  effected  up  to  that  time.  In  order 
to  avoid  legal  complications,  Mr.  Adams  forced  up  the  price  of 
No.  2  oats  in  the  New  York  market.  The  deal  included  some 
200,000  bushels  bought  at  from  38  to  40  cents  per  bushel,  and  set- 
tled between  50  and  85  cents  per  bushel,  the  average  being  about 
60  cents.  At  the  closing  hour  of  the  "squeeze"  a  sale  (jf  5,000 
bushels  at  85;^^  cents  was  the  crest  of  the  market.  The  great  corner, 
however,  was  in  corn,  and  it  was  at  this  time  that  W.  N.  Sturges 
won  the  sobriquet  of  "King  Jack."  This  operation  began  in  June 
and  was  deftly  manipulated  so  that  the  majority  of  traders  were  kept 
guessing  until  the  very  last  days  of  July.     On  July  28  Sturges 


S04  "history  of  the  board  of  trade  [1874] 

rallied  his  forces  and  sent  the  price  of  corn  up  2  cents  a  bushel ;  this 
was  followed  the  next  day  by  a  further  advance  of  8  or  9  cents.  On 
the  30th  a  selling  movement  on  his  part  induced  large  offerings 
on  the  supposition  that  the  corner  had  failed.  On  the  31st,  how- 
ever, Sturges  forced  the  price  up  to  80  cents  and  many  shorts  suf- 
fered severely,  and  Mr.  Sturges  was  accused  of  unfair  methods.  It 
was  charged  that  corn  was  sold  to  the  shorts  by  the  brokers  for 
the  ring,  and  by  preconcerted  action  deliveries  were  made  too  late 
for  the  shorts  to  make  delivery  in  turn  before  the  close  of  the  last 
business  day  of  the  month.  It  was  also  stated  that  Sturges  took 
advantage  of  the  crowd  at  his  office  to  delay  deliveries  until  the 
hour  of  delivery  had  passed.  It  was  estimated  that  1,500,000 
bushels  were  in  default,  and  the  entire  deal  was  said  to  have 
included  the  handling  of  19,000,000  bushels  of  corn,  and  to  have 
benefited  the  producers  to  the  extent  of  about  8  cents  per  bushel 
on  approximately  12,000,000  bushels.  The  Chicago  "Tribune"  of 
April  1  gave  the  following  pen  picture  of  Mr.  Sturges  in  his  hour 
of  triumph :  "Jack  Sturges  is  a  young  old  man.  His  hair  is  gray, 
but  his  mustache  and  eyes  are  juvenile.  He  disdained  the  use  of 
a  coat,  wore  a  flannel  shirt,  pants  and  vest  of  azure,  and  on  his  feet 
were  shoes  that  from  their  general  appearance  might  have  been  lent 
him  by  some  benevolent  boot-black.  Jack  looked  frightfully  cute 
and  quietly  triumphant.  He  was  the  observed  of  all  observers  and 
appeared  to  make  the  most  of  his  opportunities."  It  was  claimed 
that  Sturges  showed  little  mercy  in  settlement,  and  there  were  many 
charges  of  collusion  and  unfair  methods.  Sturges  soon  afterwards 
turned  to  the  bear  side  of  the  market  and  was  himself  caught  in 
the  corner  in  September  corn.  The  settlement  price  for  July  corn 
was  fixed  at  68  cents  per  bushel.  Sturges  refused  to  make  settle- 
ment of  his  September  deal,  and  charges  were  preferred  against 
him  looking  toward  his  expulsion  from  the  Board,  and  there  ensued 
one  of  the  most  exciting  contests  to  retain  membership  which  the 
Board  has  ever  known.  A  large  amount  of  testimony  was  sub- 
mitted to  the  Directors  in  a  protracted  investigation,  which  was 
adjourned  from  time  to  time  and  which  resulted  in  the  case  being 
submitted  to  the  full  Board  on  November  7.  Secretary  Randolph 
presented  the  charges  on  five  counts  reported  by  the  Directors. 
Sturges  denied  the  validity  of  the  award  of  the  Arbitration  Com- 
mittee and  denied  the  authority  of  the  Directors  and  the  Board. 
The  evidence,  covering  300  pages,  was  printed  and  submitted  to 
the  members  and  a  vote  on  expulsion  was  ordered.  Later  in  the 
month  Mr.  Sturges  issued  a  card  stating  that  the  prosecution  had 
issued  anonymous  pamphlets  and  circulars  almost  daily  with  the 
view  to  influencing  those  members  who  did  not  attend  the  daily 
meetings  of  the  Board,  and  asked  judgment  on  the  evidence.  That 
Mr.  Sturges  was  not  without  supporters  was  evidenced  by  the  let- 
ters to  the  press  in  his  behalf.  One  of  these  contributions  contained 


[1874]  OF  THE  CITY  OF  CHICAGO  505 

a  paragraph  which  while  not  bearing  directly  on  the  Sturges  case, 
is  of  value  as  showing  the  state  of  the  Chicago  market  at  that  time. 
The  writer  said :  "The  Chicago  system  of  inspecting  and  storing 
property  dealt  in  on  'Change  gives  facilities  for  trading  in  that  kind 
of  property  that  no  Eastern  or  European  cities  possess,  and  on 
account  of  which  the  business  done  on  'Change  in  Chicago  surpasses 
that  of  any  other  corn  or  produce  exchange  in  the  world."  The 
Board  met  on  Monday,  Novernber  23,  and  it  was  decided  to  vote  on 
the  Sturges  case  the  following  day.  T.  T.  Gurney,  W.  L.  Black- 
man,  J.  C.  Wiswell,  A.  E.  Clark  and  A.  M.  Bennett  were  appointed 
tellers.  At  the  meeting  of  the  Board  at  which  the  vote  was  ordered 
Mr.  Sturges  presented  the  following  resolution,  which  he  alleged 
that  President  How  declined  to  put  to  a  vote.  The  resolution  read : 
"Whereas,  The  charges  brought  against  W.  N.  Sturges  have  not 
been  proven,  and  further,  that  the  Directors  have  not  recommended 
his  expulsion ;  therefore.  Resolved,  That  the  vote  heretofore  taken 
to  enter  upon  a  ballot  tomorrow  be  rescinded  and  the  case  dis- 
missed." On  the  strength  of  the  alleged  failure  to  put  this  motion 
Mr.  Sturges  secured  an  injunction,  the  writ  being  served  upon  T.  T. 
Gurney  as  teller  at  3:40  p.  m.,  just  twenty  minutes  before  the  ballot 
was  to  have  closed.  This  action  created  great  excitement,  and  the 
general  interest  taken  by  the  members  is  shown  by  the  fact  that 
at  the  time  the  injunction  was  served  937  votes  had  been  cast.  The 
next  move  was  the  appearance  of  the  attorneys  of  the  Board  of 
Trade  before  the  court,  asking  that  the  injunction  be  dissolved ; 
and  the  next  move  was  the  filing  of  suit  by  Sturges  against  Presi- 
dent How  for  $25,000  damages  on  account  of  his  refusal  to  put  the 
resolution  before  mentioned  to  a  vote.  Late  in  December  Judge 
Williams  dissolved  the  injunction  against  the  Board,  and  the  polls 
were  thrown  open  for  one  hour  to  complete  the  vote  on  the  expul- 
sion of  Mr.  Sturges.  Including  the  votes  cast  on  the  24th  of  Novem- 
ber, the  result  was  681  for  and  294  against  expulsion.  His  friends  cir- 
culated the  report  that  his  accounts  were  largely  settled,  and  his 
attorneys  made  an  effort  to  prevent  the  voting.  The  vote  was 
taken,  but  Judge  McAllister  issued  an  order  which  stopped  its 
official  announcement,  and  on  December  31  issued  an  injunction 
restraining  the  Board  from  expelling  Sturges  until  the  appeal  from 
the  decision  of  Judge  Williams  had  been  acted  upon.  It  was  claimed 
by  Sturges  that  he  was  acting  as  agent  for  B.  F.  Allen,  President  of 
the  Cook  County  National  Bank,  and  upon  the  failure  of  this  con- 
cern, in  January,  1875.  it  was  shown  that  this  was  largely  the  case, 
and  that  money  supposedly  deposited  by  Sturges  for  margins  in 
this  bank  was  never  deposited.  A  large  amount  of  litigation  fol- 
lowed this  bank  failure  and,  in  July,  1875,  the  Board  of  Trade  sued 
the  Cook  County  National  Bank  et  al.  on  its  bond  of  $500,000, 
given  the  Board  to  secure  all  moneys  deposited  as  margins. 

The  year  1874  was  marked  by  numerous  attempts  to  thwart 


506  HISTORY  OF  THE  BOARD  OF  TRADE  [1874] 

the  Board  in  enforcing  discipline  upon  its  members.  The  most 
notable  instance  of  this  was  the  case  of  J.  B.  Lyon  &  Company,  the 
members  of  which,  J.  B.  Lyon,  G.  J.  Brine  and  T.  B.  Rice,  were 
suspended  for  failure  to  perform  certain  contracts  growing  out  of 
their  corner  in  1872.  Lyon  and  Brine  each  filed  a  bill  in  chancery, 
while  Rice  filed  a  petition  for  a  writ  of  mandamus.  An  interesting 
allegation  contained  in  the  petition  of  Mr.  Lyon  was  that  the  orig- 
inal roll  of  members  was  destroyed  by  the  great  fire  and  that  after- 
wards a  second  book  was  prepared  for  signatures,  at  the  top  of 
which  was  a  condition  which  the  members  subscribed  to,  when 
they  signed,  pledging  them  to  submit  to  all  the  rules  of  the  Board 
then  existing,  or  thereafter  to  be  adopted.  But  Lyon  insisted  the 
Board  could  only  act  in  accordance  with  its  charter,  and  that  such 
a  heading  to  the  roll  amounted  in  law  to  an  obligation,  when,  as  he 
claimed,  it  was  only  an  agreement,  which  would  not  bind  him  to 
any  construction  the  Board  might  choose  to  put  on  the  rules  and 
bylaws.  Lyon  and  Brine  secure  writs  enjoining  the  Directors  from 
interference  with  them  and  they  appeared  on  the  floor  of  the  ex- 
change on  May  11th.  This  and  other  similar  litigation  extended  all 
through  the  year  1874,  both  Lyon  and  Brine  having  the  privilege  of 
the  Exchange  under  protest,  and  it  was  not  until  July,  1876,  that  the 
cases  were  finally  adjudicated.  The  Supreme  Court  sustaining  the 
action  of  the  Board  of  Trade  in  expelling  T.  B.  Rice  and  the  Lyon 
and  Brine  cases  falling  under  the  same  ruling.  In  this  decision,  the 
right  of  the  Board  to  enforce  discipline  was  fully  sustained. 

In  October  there  was  a  corner  on  barley  engfineered  by  Alexander 
Geddes,  who  bought  options  on  the  month  at  90c@$1.10.  It  was 
stated  that  he  offered  to  settle  at  $1.16,  this  offer  was  refused  by 
many  of  the  shorts,  however,  and  on  October  31,  the  market  was  run 
up  to  $1.32,  $1.32  bid  with  no  offerings  and  the  corner  was  a  com- 
plete success.  There  was  default  on  about  100,000  bushels,  and  Asa 
Dow  and  Murry  Nelson,  and  J.  B.  Lyon  were  said  to  be  among  the 
losers.  The  corner  was  settled  at  $1.30  and  netted  Geddes  about 
$25,000.  The  year  1874  ended  with  still  another  corner  in  corn  which 
was  settled  on  the  basis  of  85  cents  per  bushel.  These  many  corners 
in  spite  of  the  strict  law  against  them  created  much  comment  both 
in  the  Board  and  in  the  press.  The  Chicago  "Times"  editorially  in  its 
issue  of  November  25  demanded  the  prosecution  of  all  "cornerers" 
and  named  Messrs.  Fairbank,  Adams,  Sturges  and  Geddes  as  men 
who  have  been  guilty  of  this  offense.  The  members  were  greatly 
perplexed  and  numerous  changes  in  the  rules  were  suggested.  A 
resolution  offered  by  H.  C.  Rew  was  to  the  effect  that  the  Board 
should  adopt  no  rule  which  countenanced  or  encouraged  the  non- 
fulfillment of  contracts  under  any  circumstances,  but  would  insist 
that  dealers  carry  out  their  contracts  as  made  or  be  liable  to  suspen- 
sion. The  resolution  added :  "No  corners  can  possibly  occur  when 
dealers  refrain  from  selling  what  they  have  not  got,  and  we  recom- 


£1874]  OF  THE  CITY  OF  CHICAGO  507 

mend  this  course  to  those  who  wish  to  avoid  the  usual  risks  of  at- 
tending transactions  of  this  character.  December  11  a  meeting  was 
called  to  discuss  a  proposed  amendment  offered  by  A.  M.  Wright 
and  others  to  the  eflfect  that  in  settlement  members  should  not  be 
held  liable  for  any  fictitious  damages,  but  only  for  the  actual  value  of 
the  property  covered  by  defaulted  contracts.  Consideration,  how- 
ever, was  laid  over  until  the  annual  meeting.  Among  the  social 
events  of  the  Board  of  Trade  was  the  reception  on  'Change  August 
17  of  Lord  and  Lady  Duflferin,  head  of  the  Canadian  government. 
The  reception  was  an  enthusiastic  one  with  addresses  by  the  gov- 
ernor, the  mayor,  and  President  How,  and  by  Lord  Dufiferin,  urging 
closer  trade  relations  with  Canada.  Another  social  event  was  the 
banquet  at  the  Palmer  House  in  honor  of  President  Grant,  who 
came  to  Chicago  to  witness  the  marriage  of  his  son,  Frederick  Dent 
Grant,  and  Miss  Ida  Marie  Honore.  C.  E.  Culver,  John  L.  Hancock 
and  George  Armour  represented  the  Board  of  Trade  upon  this 
occasion. 

This  was  a  year  in  which  the  farmers  of  Kansas  and  Nebraska 
suffered  greatly  on  account  of  the  grasshoppers.  On  October  22 
Gen.  E.  O.  C.  Ord  appeared  before  the  Board  seeking  relief  for  these 
stricken  farmers,  and  a  committee  of  ten  was  appointed  to  solicit  on 
the  floor  of  the  Exchange  and  from  the  business  men  of  the  city. 
At  a  meeting  held  a  week  later  it  was  reported  that  the  Board  of 
Trade  had  subscribed  $2,355. 

The  produce  trade  of  the  year  1874  did  not  exhibit  so  great  an 
increase  over  that  of  its  immediate  predecessor  as  had  been  chron- 
icled for  some  past  years.  It  was,  however,  satisfactory  on  the 
whole,  and  the  money  value  of  the  produce  far  exceeded  that  of 
1873,  prices  ruling  higher  in  most  cases,  the  chief  exceptions  being 
wheat  and  flour. 

The  produce  markets  were  unusually  active,  in  a  speculative 
way.  The  falling  ofif  in  manufacturers,  and  the  rather  extensive 
distrust  of  railroad  and  other  stocks,  born  of  the  panic  of  1873, 
made  money  unusually  plentiful  all  through  the  year,  especially 
as  real  estate  was  also  slow  in  most  American  cities  for  the  same 
cause.  Money  was  cheap  to  those  who  could  give  first-class  col- 
lateral, and  produce  paper  was  regarded  as  the  very  best  security, 
being  preferred  by  some  bankers  even  to  United  States  bonds, 
because  more  readily  convertible.  Hence  there  was  an  enormous 
stimulus  to  speculation  in  produce.  Eastern  capitalists  sent  their 
money  as  margins  on  grain  and  pork,  transferring  their  attentions 
from  Wall  Street  to  the  lake  shore.  Chicago  men  entered  the  mar- 
kets in  greater  numbers  than  ever,  and  the  list  of  "Western"  men 
was  largely  increased,  as  the  extraordinary  closeness  with  which  the 
crops  had  been  marketed  at  very  good  prices  previous  to  the  last 
opening  of  navigation,  enabled  many  people  in  the  country  to 
"invest"   who    had    hitherto   contented    themselves    with    plodding 


508  HISTORY  OF  THE  BOARD  OF  TRADE  [1874] 

along  the  dull  pathway  to  commercial  success  in  the  country  dis- 
tricts. 

The  low  rates  of  lake  freights  during  the  season  helped  to 
draw  through  Chicago  no  small  proportion  of  the  produce  that 
would  otherwise  have  gone  around  the  city  by  rail.  Large  quan- 
tities of  corn  came  hither  from  Peoria  and  other  points  for  lake 
shipment  which  would  not  have  touched  Chicago  but  for  low  rates 
by  water,  which  the  railroads  were  unable  to  compete  with  suc- 
cessfully. 

The  volume  of  produce  pouring  through  the  city  was  enor- 
mous; not  less  than  2,447,226  tons  of  breadstufifs  and  about  984,000 
tons  of  live  stock. 

For  the  handling  of  grain  in  Chicago  there  were  fifteen  eleva- 
tors, with  an  aggregate  storage  capacity  of  14,100,000  bushels, 
without  including  the  Danville  and  Neely's  elevators.  One  of  these, 
the  Armour,  Dole  &  Co.'s  "C,"  with  a  capacity  of  1,500,000  bushels, 
was  built  during  1874.  The  conduct  of  the  business  of  warehousing 
in  1874  was  unusually  satisfactory,  no  complaints  of  consequence 
being  made.  No  false  bottoms  in  bins,  no  surreptitious  lending 
of  grain,  no  unfair  mixing  of  grades,  as  in  former  years.  The  grain 
inspection,  too,  was  performed  more  satisfactorily,  the  appeals  to 
the  committee  being  few.  The  registration  department  worked 
smoothly,  and  in  all  respects  the  business  of  grain  handling  outside 
the  Board  of  Trade  was  done  in  a  model  way.  The  standards  of 
inspection  came  to  be  regarded  as  very  good,  and  bade  fair  to  be 
adopted  in  all  seaboard  ports  which  received  grain  from  Chicago. 

Provision 

The  market  for  provisions  was  the  scene  of  much  speculative 
excitement  during  a  great  part  of  the  year,  and  unusually  high 
prices  resulted.  The  fluctuations  were  rather  wide,  but  not  so 
severe  as  might  have  been  expected.  Indeed,  it  was  surprisingly 
steady  most  of  the  time  up  to  the  opening  of  the  packing  season. 
The  business  of  the  year  naturally  divides  in  summer  or  fall,  instead 
of  in  winter,  which  is  the  time  of  the  greatest  activity.  Hence  the 
work  of  two  calendar  years  can  only  be  compared  with  difficulty, 
and  not  always  correctly.  In  1873  and  1874  the  greater  portion  of 
the  winter's  work  was,  however,  thrown  into  the  months  of  Novem- 
ber and  December,  so  that  the  comparison  may  be  made  more 
closely  than  previously. 

The  panic  of  September,  1873,  forced  down  the  prices  of  pro- 
visions, in  common  with  other  produce,  to  so  low  a  point  as  to 
invite  heavy  speculative  investments  after  the  first  blast  was  over, 
and  the  result  of  this  was  an  advance  which  checked  the  consump- 
tive demand  so  much  towards  the  close  of  the  year  that  grave  fears 
were  entertained  in  regard  to  the  ability  of  holders  to  get  rid  of 
their  stocks  without  serious  loss. 


[1874]  OF  THE  CITY  OF  CHICAGO  509 

Mess  pork  opened  at  about  $14,  declined  to  $13.95  near  the 
close  of  February,  rose  to  $16.40  the  first  week  of  April,  fell  back  to 
$16,  rose  to  $17.80  in  the  latter  part  of  May,  receded  to  $17.15  in  the 
first  half  of  June,  and  advanced  to  $24.50  in  August.  The  market 
then  weakened  to  $22.75,  touched  $24.50  in  September  and  gradu- 
ally sold  down  to  $17.50  on  the  new  crop  in  the  beginning  of  Novem- 
ber. During  the  last  three  weeks  of  November  it  strengthened  to 
$20.75  and  closed  at  $18.85. 

The  number  of  hogs  packed  in  the  Mississippi  Valley  states 
increased  a  trifle  less  than  100,000,  while  the  increase  in  Chicago 
was  more  than  170,000,  and  in  Illinois  226,000,  thus  showing  a  con- 
siderable loss  in  other  states.  Cincinnati,  St.  Louis,  Indianapolis 
and  Milwaukee  all  showed  losses,  while  Louisville's  packing  busi- 
ness increased.  In  Missouri,  Kansas  City  lost  nearly  50  per  cent, 
a  large  part  of  which  was  gained  by  St.  Joseph.  Omaha  was  com- 
paratively unimportant  as  a  packing  center,  the  statistics  showing 
that  "Omaha  and  other  points"  in  Nebraska  packed  26,950  hogs, 
being  less  for  the  entire  state  than  for  any  one  of  six  cities  in  Iowa. 
The  grand  total  for  the  states  of  the  Mississippi  Valley  for  the  sea- 
son 1874-75  was  5,561,226,  of  which  Chicago  packed  1,690,348,  or 
considerably  more  than  one-fourth.  At  the  same  time  the  packing 
of  beef  in  Chicago  was  nearly  double  that  of  the  preceding  year. 
Cattle  receipts  were  843,966  head  and  shipments  622,929.  Live  hogs, 
receipts,  4,259,629;  shipments,  2,330,661. 

Hides 

The  trade  in  hides  shared  in  the  depression  of  the  leather  mar- 
ket, but  this  was  counteracted  to  some  extent  by  the  foreign  demand, 
and  prices  at  times  were  relatively  higher  in  Chicago  than  in  eastern 
markets.  A  prominent  feature  was  the  direct  exportation  of  both 
hides  and  leather  to  England  and  the  Continent.  The  average 
prices  for  the  year  were :  Green  hides,  light,  9.4  cents ;  green  hides, 
heavy,  8.6  cents ;  green  calf  skins,  14.9  cents,  and  dry  hides,  19.3 
cents.  .--^  "Y-  a  I  "V! 

The  grain  movement  during  the  year  was  about  three  per  cent 
less  in  the  aggregate  than  in  1873.  In  all  the  cereals,  except  wheat, 
there  was  a  decided  falling  off  in  receipts,  but  flour  and  wheat 
showed  a  fair  increase.  The  movement  as  a  whole  was  very  satis- 
factory, as  it  was  the  general  impression  early  in  the  season  that  the 
returns  for  the  year  would  show  a  diminution  on  account  of  the 
moderate  nature  of  the  crops  of  corn,  oats  and  barley  gathered  in 
1873.  The  large  discrepancy  between  the  receipts  and  shipments, 
some  11,500,000  bushels  in  the  tabulated  statement  annexed,  was 
easily  explained.  There  were  over  4,000,000  bushels  in  store  in 
December,  1874.  The  local  consumption  for  the  year  aggregated 
over  4,000,000.  besides  the  "track  grain"  unloaded  from  cars,  and 
of  which  no  record  was  kept  so  far  as  its  disposition  was  concerned. 


510                     HISTORY  OF  THE  BOARD  OF  TRADE  [1874] 

but  which  was  estimated  at  2,500,000.     Receipts  and  shipments  of 
the  different  cereals  amounted  to  the  following : 

Articles                                                      Received  Shipped 

Flour,  barrels   2,666,679  2,306,576 

Wheat,  bushels 29,764,622  27,634,587 

Corn,  bushels    35,799,638  32,705,224 

Oats,  bushels 13,901,235  10,561,673 

Rye,  bushels   791,182  335,077 

Barley,  bushels  3,354,981  2,404,538 


Total  (flour  reduced  to  wheat)..  95,611,713  84,020,691 

In  all  the  leading  cereals  the  trading  almost  from  the  opening 
to  the  close  of  the  year  was  on  a  liberal  scale,  while  in  corn,  oats 
and  barley  corners  of  more  than  customary  magnitude  were  main- 
tained for  one  or  more  months.  Indeed  at  the  close  of  the  year  old 
corn,  oats,  and  in  some  measure  barley,  was  under  the  manipulation 
of  a  few  parties  who  had  secured  control  of  the  stocks  of  the  cereals 
named  then  in  store.  As  might  be  expected,  prices  were  irregular, 
and  frequently  the  fluctuations  experienced  went  through  an 
unusually  wide  margin. 

Flour. — Trade  in  flour  was  depressed  and  unsatisfactory  as  a 
whole,  although  there  was  a  fair  demand  from  Europe  and  the  East 
during  the  first  half  of  the  year.  After  midsummer  prices  ruled  very 
low,  increasing  the  demand  for  the  better  grades.  Owing  to  the 
superior  advantages  offered  by  the  Chicago  wheat  market,  Chicago 
millers  were  able  to  compete  successfully  with  western  millers.  The 
high-grade  flours  were  sold  in  the  domestic  market,  the  export 
demand  being  for  medium  qualities.  The  export  grades  were  known 
as  "Spring  Shipping  Extras,"  and  prices  ranged  from  $4  to  $6 
during  the  year.  Production  of  flour  in  Chicago  decreased  slightly. 
Secretary  Randolph  reporting  the  number  of  barrels  manufactured 
during  the  year  as  244,667,  against  264,363  in  1873. 

Wheat. — The  opening  price  for  No.  2  spring  wheat  in  January, 
1874,  was  $1.18.  From  this  figure,  however,  the  market  subse- 
quently advanced  to  $1.26i/2.  In  February  the  range  paid  for  the 
same  grade  was  $1.16@1.24,  and  in  March  $1.16%@1.23K'.  On 
the  approach  of  the  resumption  of  lake  navigation  the  trade  natu- 
rally assumed  a  more  active  and  interesting  appearance.  Shippers 
began  to  make  their  arrangements,  outside  orders  exhibited  some- 
thing of  an  increase,  and  price  for  the  month  took  a  decided  upward 
turn.  Hence,  in  April,  holders  held  the  advantage,  and  sales  were 
made  as  high  as  $1.28^4,  the  lowest  touched  being  $1.19.  In  May 
the  market  fluctuated  between  $1.16@1.23,  without  developing  any 
noteworthy  features,  save  an  active  speculative  demand  and  a 
bearish  tendency  in  the  prevailing  feeling.  In  July,  however,  the 
tone  of  affairs  underwent  a  material  change.    It  being  pretty  gener- 


[1874]  OF  THE  CITY  OF  CHICAGO  511 

ally  ascertained  that  the  incoming  crop  in  this  country  and  else- 
where would  show  a  much  larger  per  cent  of  increase  than  was 
expected  by  the  best  informed  statisticians,  the  bear  side  became 
the  favorite  one  with  almost  all  classes  of  operators.  During  the 
month  prices  fell  from  $1.16,  the  highest  figure  paid,  to  $1.04>4. 
In  August  the  bear  feeling  gained  strength  and  sales  were  made 
as  low  as  91  cents.  In  September  the  range  was  91 J4  cents  to  $1.02, 
and  in  October  81>4@94>^  cents,  and  in  November  84>4@92%  cents. 
During  December  prices  ranged  from  87^^  to  92  cents.  The  move- 
ment of  the  market  since  the  break  in  July  was  bearish  and  of  a 
nature  to  check  business.  Prices  being  much  lower  than  farmers 
anticipated,  the  marketing  of  the  new  crop  was  slow  and  spasmodic, 
and  receipts  during  the  fall  averaged  less  than  in  former  years. 

Com. — This  market  was  the  center  of  interest  in  grain  circles 
during  a  good  portion  of  the  year.  For  the  first  few  months  the 
movement  was  sufficiently  slow  and  prosaic  to  suit  the  most  high- 
minded  and  straight-laced  merchant  on  'Change,  but  in  June  the 
trade  gradually  passed  under  the  control  of  the  redoubtable  "Jack" 
Sturges,  who  was  the  representative,  as  it  was  believed,  of  an  exten- 
sive combination.  From  January  1  to  June  1  the  fluctuations  in  the 
market  for  No.  2  extended  from  53^  to  65%  cents,  the  lowest  point 
being  touched  in  January  and  the  highest  in  May.  In  June  the 
market  ranged  from  56@64^  cents,  with  Mr.  Sturges  and  his 
numerous  brokers  the  leading  buyers  on  the  floor.  In  July  Sturges 
began  to  complete  his  arrangements  for  a  corner,  which  finally  cul- 
minated with  the  close  of  the  month.  During  the  first  few  weeks 
prices  ranged  back  and  forth  with  more  or  less  irregularity  between 
58f^  and  6234  cents.  As  the  end  approached,  however,  the  "King" 
gradually  advanced  prices.  On  the  last  day  of  the  month  as  high 
as  75  cents  was  paid  for  current  arrivals,  though  some  sales  were 
reported  by  the  corner  at  80  cents.  In  August  the  market  was 
steady  and  firm  at  an  average  of  about  65  cents.  In  September, 
however,  the  trade  on  legitimate  account  assumed  an  active  appear- 
ance ;  the  demand  from  all  quarters  was  urgent,  and  prices  steadily 
worked  their  way  up  to  86  cents,  which  was  the  "top"  figure  realized 
during  the  year.  In  October  sales  were  made  from  83j4  cents  down 
to  69  cents,  the  market  being  aiifected  unfavorably  by  the  splendid 
weather  for  maturing  the  new  crop,  the  arrival  of  the  new  corn,  and 
the  low  prices  prevailing  for  wheat.  In  November  the  trade  again 
passed  into  the  hands  of  a  few  parties.  During  the  month  indicated 
7\%@?>Sy2  cents  covered  the  fluctuations  in  prices,  and  during 
December  71^@85  cents.  New  No.  2  corn  sold  at  65@67  cents  dur- 
ing the  last  six  weeks  of  the  year.  December  18  old  No.  2  sold  at 
76^  cents  and  new  at  6SJ4  cents. 

Oats. — This  grain  attracted  more  than  usual  interest  during  the 
year,  and  in  July  was  cornered.  During  the  early  part  of  the  year 
there  were  comparatively  few  exciting  features  in  the  market  worthy 


512  HISTORY  OF  THE  BOARD  OF  TRADE  [1874] 

of  special  notice,  trade,  as  is  usual  in  winter  months,  being  quite 
dull,  but  as  the  season  advanced  more  interest  was  manifested  by 
operators,  and  there  was  for  quite  a  period  a  steady  upward  move- 
ment in  prices.  In  January  the  lowest  price  paid  for  No.  2  was 
383/2  cents  and  the  highest  figure  obtained  was  44  cents.  Higher 
average  prices,  however,  were  current  the  following  month,  the 
entire  range  being  4l3/^@4334  cents.  In  March  trade  commenced 
to  show  some  animation,  and  from  42^/2  cents,  the  lowest  price  paid 
in  the  entire  month,  No.  2  was  advanced  to  45y2  cents.  The  opening 
of  navigation  created  a  good  shipping  demand,  freight  being  suffi- 
ciently low  to  allow  a  fair  margin  to  shippers,  and  during  April  the 
market  was  more  lively  than  in  any  previous  month  of  the  year, 
prices  being  advanced  from  4234  to  46%  cents,  though  that  figure 
was  not  sustained  very  long.  In  the  month  following  the  shipping 
movement  became  quite  brisk,  and  the  lowest  price  paid  was  44 
cents,  while  at  times  sales  were  made  as  high  as  483^  cents,  there 
being  a  decided  upward  tendency  on  the  market.  In  June  trading 
was  fairly  active,  but  there  was  considerable  fluctuation  in  values, 
sales  ranging  from  4234  to  4734  cents.  In  July  an  active  market 
was  witnessed,  and  toward  the  close  of  the  month  a  corner  of  con- 
siderable magnitude  was  developed,  which  frightened  the  unfortu- 
nate "shorts"  a  good  deal.  The  stocks  in  store  by  steady  lake  ship- 
ments had  been  reduced  to  less  than  25,000  bushels,  and  as  the  new 
crop  was  very  slow  in  being  marketed,  it  was  impossible  to  fill  the 
large  orders  constantly  arriving  from  the  East.  In  New  York  the 
scarcity  was  so  great  that  No.  2  oats  were  easily  bid  up  by  the 
Chicago  manipulators  to  $1  per  bushel,  and  in  this  city  the  same 
grade  was  advanced  by  them  to  85%  cents.  The  lowest  price  paid 
in  July  was  4234  cents.  The  month  of  August  witnessed  an  active 
market,  but  the  high  prices  of  the  previous  month  were  not  sus- 
tained, and  the  range  of  quotations  was  373i@46  cents.  After  the 
close  of  the  summer  there  was  a  decided  bullish  feeling,  owing  to 
the  fact  that  the  crop  fell  greatly  below  the  expectations  of  nearly 
every  one  interested  in  the  market.  The  shipments  by  lake  con- 
tinued large,  and  prevented  any  considerable  increase  in  the  stocks 
at  Chicago,  and  of  course  prices  were  higher.  In  September  40 
cents  was  paid  at  one  time  for  No.  2,  but  this  was  an  exceptionally 
low  figure,  and  sales  were  made  as  high  as  54  cents.  October  was 
made  memorable  by  the  manipulation  of  another  corner,  inaugu- 
rated and  carried  through  by  a  few  strong  operators,  who  took 
advantage  of  the  condition  of  the  "shorts"  here  and  elsewhere,  and 
of  the  short  crop,  by  advancing  prices.  Large  numbers  of  "shorts" 
experienced  great  difficulty  in  filling  their  contracts  and  from  46 
cents  prices  went  up  to  5034  cents.  In  the  following  month  there 
was  a  decided  falling  ofif  in  trade,  owing  to  the  approaching  close 
of  navigation,  but  the  meager  receipts  prevented  any  permanent 
depression  in  values,  and  while  4634  cents  was  the  lowest  figure 


[1874]  OF  THE  CITY  OF  CHICAGO  513 

paid  for  No.  2  sales  were  made  as  high  as  553^  cents.  During  De- 
cember trade  was  rather  dull,  prices  ranging  from  52@54j/2  cents. 

Rye. — High  prices  generally  obtained  for  this  grain  during  the 
year,  and  for  the  later  months  there  was  a  decided  bullish  feeling, 
the  crops  being  quite  small.  In  January  the  entire  range  of  prices 
paid  for  No.  2  was  763^@83  cents.  In  February  a  stronger  feeling 
was  developed  and  the  range  was  80@85j4  cents,  while  the  March 
prices  were  advanced  from  84  to  92  cents.  In  the  following  month 
sales  ranged  from  90  to  93  cents,  and  in  May  sales  were  made  at  91 
cents  to  $1.02.  In  June  prices  were  lower,  sales  being  made  at 
84@90  cents,  while  in  July  the  market  was  excited  and  fluctuating, 
prices  ranging  from  76  cents  to  $1.  Fair  sales  were  made  in  August 
at  70@75  cents.  In  September  there  was  quite  an  active  inquiry, 
and  the  short  crop  and  inadequate  receipts  caused  a  stronger  feel- 
ing to  prevail,  prices  advancing  from  75  to  92  cents.  During  the 
remainder  of  the  year  the  market  was  active  to  the  extent  of  the 
offerings,  sales  ranging  at  81@90  cents  in  October,  and  82@94j4 
cents  in  November.  Fair  sales  were  made  in  December  at  93@99j^ 
cents. 

Barley. — During  the  early  part  of  the  year  trading  in  this  mar- 
ket was  quite  dull,  and  until  the  new  crop  commenced  to  arrive 
transactions  on  both  legitimate  and  speculative  account  were  on  a 
rather  limited  scale.  The  offerings  were  correspondingly  small, 
however,  and  hence,  while  at  times  prices  would  favor  buyers,  the 
general  feeling  was  comparatively  strong.  In  January  there  was  a 
steady  upward  tendency  in  the  market,  and  from  $1.41,  the  opening 
price  of  No.  2,  was  advanced  to  $2.05.  During  February  prices 
covered  a  rather  wide  range,  extending  from  $1.59  to  $2.05,  while 
in  the  following  month  sales  ranged  at  $1.49@1.60.  In  April  sales 
covered  a  range  of  $1.50@1.71,  but  in  May  there  was  a  decline  in 
prices,  sales  ranging  at  $1.30@1.55,  ruling  at  $1.05@1.40  in  June, 
$1@1.20  in  July  and  87  cents  to  $1.05  in  August.  In  the  month  of 
September  trading  was  more  active,  and  as  the  receipts  were  insuffi- 
cient to  meet  the  increased  requirements  of  the  trade,  prices  ruled 
higher,  advancing  from  91  cents  to  $1.16.  During  October  the 
market  was  unusually  animated  and  the  upward  movement  in  prices 
was  still  a  feature  of  the  trade,  the  crop  being  smaller  than  expected 
and  the  receipts  totally  inadequate  to  meet  the  demand.  Early  in 
October  99  cents  was  paid  for  No.  2,  but  as  the  month  advanced 
it  became  evident  that  a  substantial  corner  had  been  developed, 
and  on  the  last  day  of  the  month  sales  were  made  as  high  as  $1.32, 
the  "shorts"  being  obliged  to  settle  at  $1.30  for  seller  the  month. 
During  the  following  month  trade  continued  brisk  and  $1.10j/2  was 
the  lowest  price  paid,  sales  being  made  as  high  as  $1.33j/2.  Chicago 
drew  freely  on  California  for  barley  during  the  year,  the  total 
receipts  by  rail  from  that  state  reaching  320  carloads.  California 
also  shipped  considerable  amounts  to  New  York  by  sea.     Trade 


514  HISTORY  OF  THE  BOARD  OF  TRADE  [1875] 

was  fairly  active  in  December  at  $1.20@1.29,  prices  undergoing 
severe  fluctuations. 

Seeds 

There  was  a  large  crop  of  timothy  in  1874  and  the  market  was 
already  fairly  stocked  from  the  crop  of  1873.  Thus  prices  were 
depressed,  although  subject  to  wide  fluctuations ;  $3.20  was  the 
high  price  for  the  year,  and  the  low  quotation  was  $2.40.  In  clover 
prices  ranged  higher,  prime  old  clover  before  the  harvest  selling  at 
from  $5.50  to  $5.90.  The  high  price  for  new  seed  was  $6.75,  but  dur- 
ing the  latter  part  of  the  year  the  price  was  between  $5.40  and  $5.70. 
There  were  indications  that  the  cultivation  of  flax  was  increasing 
throughout  the  West.  Receipts  of  flax  seed  were  heavy,  the  bulk 
going  direct  to  the  crushers.  The  market  opened  at  $1.65,  and  the 
quotations  at  the  close  of  the  year  were  $1.90@2. 

Liunber 

Lumber  receipts  for  1874  were  somewhat  under  those  of  1872, 
the  banner  year  of  Chicago's  lumber  history  up  to  that  time,  and  it 
was  claimed  that  Chicago  handled  one-tenth  of  all  the  lumber  pro- 
duced in  the  United  States  and  was  the  largest  lumber  market  in 
the  world.  The  receipts  were  1,053,809,158  feet,  and  it  was  esti- 
mated that  Chicago's  interests  in  the  mill  properties  and  the  pine 
lands  of  Michigan  and  Wisconsin  amounted  to  $75,000,000,  with 
approximately  $40,000,000  additional  invested  in  the  lumber  trade 
in  the  city.  The  trade  was  not  remunerative,  owing  to  the  low 
prices  consequent  upon  overproduction.  The  cost  of  obtaining 
good  logs  was  also  increased  as  the  nearer  forests  were  cut  over, 
but  this  was  counterbalanced  by  the  low  lake  freights,  which  were 
lower  than  since  1861,  and  the  decreased  cost  of  manufacture.  The 
Lumbermen's  Exchange  was  formed  during  this  year  and  at  once 
proved  itself  of  value  in  the  gathering  of  statistics  and  in  the 
inauguration  of  a  central  system  of  inspection  and  measurement. 
The  wholesale  business  to  country  yards  developed  greatly,  but 
local  trade  was  restricted  by  the  passage  of  fire  district  ordinances 
by  the  city.  |/ 

Produce  Exchange 

The  Produce  Exchange  was  organized  in  May,  1874,  and  soon 
had  a  membership  of  331.  It  proved  a  great  help  to  the  street 
produce  trade,  particularly  in  the  gathering  of  statistics.  The 
system  of  selling  poultry  by  the  pound  was  introduced  and  other 
market  changes  made. 

1875 

At  the  annual  election  of  1875  George  Armour  was  elected 
President,  John  R.  Bensley  became  First  Vice-President  and  D.  H. 
Lincoln  was  elected  Second  Vice-President.  The  new  Directors 
were  C.  T.  Wheeler,  H.  H.  Ross,  J.  B.  Dutch,  E.  W.  Densmore  and 
R.  P.  Murphey.     In  their  annual   report  the  directors  gave  the 


[1875]  OF  THE  CITY  OF  CHICAGO  515 

receipts  for  the  year  as  $80,482.67,  and  the  disbursements  as 
$72,117.41,  with  a  balance  in  the  treasury  of  $8,558.42.  The  assets 
had  grown  from  $121,603.23  to  $145,833.82,  and  the  membership 
was  1,651.  The  report  also  spoke  enthusiastically  of  the  proposed 
building  of  the  Hennepin  Canal  and  of  the  double  track  freight  rail- 
way between  Chicago  and  New  York.  It  urged  reciprocity  with 
Canada,  and  suggested  that  the  Board  hold  stated  meetings  for  the 
discussion  of  matters  of  general  interest.  The  litigation  of  the 
preceding  year  relative  to  the  discipline  of  the  Board  was  discussed, 
and  it  was  stated  that  while  the  power  of  the  Board  had  not  been 
denied  by  the  courts  there  was  reason  to  complain  of  the  readiness 
with  which  injunctions  were  granted  tending  to  paralyze  discipline, 
and  the  vote  on  the  expulsion  of  Mr.  Sturges  was  cited  to  prove 
that  the  membership  approved  of  strict  discipline. 

On  January  13  the  Board  of  Trade  was  the  scene  of  a  demon- 
stration which  caused  considerable  adverse  comment  in  the  press 
and  on  the  part  of  the  more  sedate  members.  King  Kalakaua,  king 
of  the  Hawaiian  Islands,  was  the  guest  of  Chicago  and  was  received 
on  'Change.  He  was  escorted  to  the  office  of  the  Directors,  where 
an  address  of  welcome  was  given  by  President  Armour,  to  which 
the  king  responded.  He  was  then  taken  to  the  Exchange  room, 
where  he  was  given  a  boisterous  reception,  the  younger  members 
joining  in  singing  what  was  then  a  popular  song,  "The  King  of  the 
Cannibal  Islands."  Order  was  finally  restored  and  President 
Armour  made  a  speech,  to  which  the  king  replied  with  a  bow. 
Mayor  Colvin  then  spoke,  saying:     "I  have  the  honor  of  escorting 

into  your  midst  the  king  of  the  Can "     This  was  greeted  with 

a  tremendous  outburst  of  laughter  and  the  mayor  apologized,  but 
the  king  was  evidently  offended  and  soon  left  the  chamber.  Later 
two  members  attempted  a  burlesque  reception,  one  representing 
President  Armour,  and  the  other,  in  a  black  mask,  representing 
the  king.  This  was  too  much  for  the  self-respect  of  the  Board,  the 
offending  members  were  hooted  down,  a  drum  head  court  martial 
was  held  and  they  were  suspended  for  one  week.  The  following 
day  J.  R.  Bensley,  C.  T.  Wheeler  and  A.  S.  Burt  were  appointed 
as  a  committee  on  decorum. 

In  March  there  occurred  a  general  revision  of  the  rules  of  the 
Board  of  Trade.  This  included  many  changes,  which  were  con- 
sidered at  two  special  sessions,  and  were  adopted  by  a  vote  taken 
on  March  18.  Among  the  changes  made  was  one  increasing  the 
Board  of  Directors  from  ten  to  fifteen  members,  and  there  were 
added  regulations  as  to  trials  for  improper  conduct,  and  to  enforce 
the  carrying  out  of  contracts.  The  initiation  fee  was  increased  to 
$1,000,  to  take  effect  July  1,  1875,  up  to  which  time  the  fee  was  to 
remain  at  $250.  An  effort  was  made  to  prescribe  that  banks,  where 
margins  were  deposited,  should  deposit  collateral  securities  with 
the  Exchange,  but  this  was  dropped  as  impractical  and  the  provision 


516  HISTORY  OF  THE  BOARD  OF  TRADE  [1875] 

for  a  bond  was  allowed  to  stand.  This  revision  was  largely  in  the 
nature  of  recodification  and  included  few  innovations,  except  those 
mentioned  above.  In  April  the  charges  which  had  been  made  a 
year  before  against  Chief  Qrain  Inspector  W.  H.  Harper  were 
renewed,  and  a  Senate  Committee  was  appointed  to  investigate. 
R.  McChesney,  a  former  chief  inspector,  was  one  of  the  star  wit- 
nesses. As  a  result  of  the  investigation  Harper  was  suspended, 
and  was  charged  with  a  shortage  of  some  $14,000.  O.  L.  Parker 
was  made  chief  inspector;  but,  acting  under  legal  advice,  Harper 
refused  to  yield  the  office  or  to  turn  over  the  cash,  and  for  a  time 
there  were  two  chief  inspectors.  Parker  finally  caused  the  lock  on 
the  door  of  the  office  to  be  changed  and  took  possession.  The  atten- 
tion of  the  Board  during  these  earlier  months  of  1875  was  largely 
confined  to  questions  of  inspection,  grading,  etc.,  but  the  growth 
of  the  grain  trade  and  the  standing  of  the  members  of  the  Exchange 
were  shown  by  an  article  in  the  "Tribune"  of  April  17,  which  said : 
"The  grain  trade  involves  sums  vastly  in  excess  of  those  used  in  any 
other  traffic  in  any  other  city  on  this  continent,  and  the  grain  men 
are  of  the  highest  class.  The  grain  trade  is  divided  into  two  classes 
— the  one  dealing  in  real  values  and  the  other  in  purely  speculative 
values.  In  the  former  class  $200,000,000  is  used  annually,  and  in  the 
latter  class  nearly  $2,000,000,000  are  used. '  In  1874  the  grain,  flour, 
provision  and  cattle  trade  used  over  $300,000,000,  this  being  equal 
to  the  entire  expense  of  government."  An  article  written  by  Mon- 
sieur Simonin,  published  in  the  "Revue  des  Deux  Mondes"  of  Paris, 
said  of  Chicago  business  men :  "The  greater  number  of  them,  by 
their  loyalty,  punctuality  and  fidelity  to  their  work,  are  an  honor 
to  American  commerce,  and  never  allow  their  paper  to  be  protested. 
Their  commercial  virtue  meets  with  its  reward.  They  make 
princely  fortunes,  while  mere  adventurers  coming  to  the  city  meet 
with  little  success."  In  May  came  the  unearthing  of  the  great 
frauds  by  the  whiskey  ring.  Board  of  Trade  members  were  not 
involved  in  these,  although  it  had  a  decided  eflfect  upon  the  market. 
On  the  16th  it  was  stated  that  the  high  wines  market  was  paralyzed, 
as  it  was  difficult  to  get  advances  on  goods,  brokers  not  knowing 
but  the  property  might  be  seized  for  want  of  a  clear  title.  These 
exposures  involved  many,  not  only  among  those  in  the  liquor  trade, 
but  a  large  number  of  government  officials,  and  the  sensational 
trials  covered  a  period  of  several  years,  a  number  of  those  found 
guilty  receiving  penal  sentences.  The  greatest  speculative  move- 
ment, in  the  fore  part  of  1875,  was  in  provisions.  On  the  third  of 
June,  lard  declined  55  cents  per  hundred  pounds,  and  this  was  fol- 
lowed by  other  rapid  declines,  which  caused  a  number  of  failures, 
George  J.  Brine,  who  had  made  such  a  fight  to  retain  his  member- 
ship on  the  Board,  being  among  those  to  fail,  as  was  also  Gardner 
P.  Comstock.  Out  of  those  bankruptcies  grew  much  litigation  in 
which  the  Board  of  Trade  was  interested.     In  July  claims  against 


[1875]  OF  THE  CITY  OF  CHICAGO  517 

Comstock,  amounting  to  $338,734.83,  were  settled  at  25  cents  on 
the  dollar. 

The  National  Board  of  Trade  met  at  Philadelphia  June  16,  and 
that  it  was  losing  something  of  its  prestige  was  shown  by  the 
withdrawal  from  membership  of  the  Boards  of  Trade  of  Cincinnati, 
Salem,  Buffalo  and  Oswego.  The  New  York  Board  of  Trade  was 
permitted  to  take  seats,  but  was  not  permitted  to  vote.  Among  the 
resolutions  adopted  was  one  recommending  substitution  of  measure 
by  weight  for  the  antiquated  method  of  measuring  by  cubics.  A 
resolution  proposed  by  the  Board  of  Trade  of  the  city  of  Chicago, 
and  advocated  by  S.  H.  McCrea,  urging  reciprocity  with  Canada, 
was  adopted.  The  following  resolution  was  evidently  in  advance 
of  the  thought  of  the  time,  for  after  much  discussion  it  was  tabled. 
The  resolution  in  question  read :  "That  where  transportation  lines 
are  located  within  the  lines  of  a  state  they  should  be  regulated  by 
state  legislation ;  but,  where  they  are  engaged  in  interstate  com- 
merce, it  is  the  duty  of  the  National  government  to  prescribe  and 
enforce  such  regulations  as  will  insure  substantial  justice  to  all 
concerned."  The  National  body  also  declared  for  the  improvement 
of  water  lines,  but  insisted  that  such  improvements  should  be  lim- 
ited to  short  lines  between  great  bodies  of  water.  The  resolutions 
further  recommended :  Frist,  concerted  action  against  the  addition 
to  bills  of  lading  and  railroad  receipts,  of  conditions  unknown  to  the 
common  law ;  second,  that  inland  carriers  be  required  to  deliver  the 
quantity,  by  weight,  of  grain  shipped  ;  third,  advocating  the  appoint- 
ment of  a  committee  of  American  and  Canadian  merchants  to  pre- 
pare a  treaty  for  reciprocal  trade  between  the  two  countries ;  fourth, 
recommending  liberal  patronage  of  the  Centennial  Exhibition  ;  fifth, 
urging  continued  attention  to  the  subject  of  transportation  by  Con- 
gress and  the  state  legislatures ;  sixth,  urging  the  establishment  by 
Congress  of  a  bureau  to  gather  and  disseminate  information  on  the 
subject  of  transportation ;  seventh,  insisting  that  railroads  should 
receipt  for  actual  quantities  of  merchandise  and  deliver  same  at 
destination ;  eighth,  favoring  the  resumption  of  specie  payment  and 
the  withdrawal  and  cancellation  of  legal  tender  notes. 

In  June,  O.  S.  Hough,  whose  suspension  had  been  ordered, 
applied  for  an  injunction  to  restrain  the  Board  of  Trade  from  inter- 
fering with  him  in  his  business  as  a  member,  and  declaring  the 
resolution  to  suspend  him  to  be  null  and  void ;  and  a  week  later, 
before  a  hearing  was  had,  the  Board  of  Trade  restored  Hough, 
whereupon  the  injunction  proceedings  were  dropped.  A  commer- 
cial event  of  considerable  importance  was  recorded,  in  July,  1875, 
when  the  first  cargo  of  wheat  shipped  from  Chicago  on  direct  order 
to  Germany  was  forwarded,  on  the  19th,  by  Seckel  &  Rosenbaum. 
It  was  billed  through  to  Antwerp.  Before  that  time  the  require- 
ments of  Germany  had  been  chiefly  filled  from  England  and  Russia. 
Still  another  item  of  importance  was  the  institution  of  the  first  fast 


Sl»  HISTORY  OF  THE  BOARD  OF  TRADE  [1875] 

mail  service  between  New  York  and  Chicago,  in  September.  The 
progress  of  this  first  train  was  followed  by  the  newspapers,  and  the 
inauguration  of  a  26-hour  service  between  the  two  great  cities  was 
hailed  with  delight  by  the  business  men  at  both  ends  of  the  line. 
In  the  latter  part  of  July  the  Chicago  newspapers  voiced  the  senti- 
ment of  the  majority  of  the  Board  of  Trade  by  instituting  a  crusade 
against  state  grain  inspection.  The  "Tribune"  said,  editorially,  that 
grain  coming  to  Chicago  was  inspected  by  politicians,  and  that  the 
inspection  was  framed  to  injure  and  divert  business  from  Chicago; 
that  the  state  inspection  at  Chicago  was  notoriously  ignorant  and 
fraudulent  and  the  whole  system  a  species  of  blackmail.  The 
"Tribune"  also  charged  favoritism  to  grain  shipped  over  certain 
lines  and  stated  that  the  firm  of  Gillespie  &  Bancroft  of  Kansas 
City  shipped  18  cars  of  wheat  to  Chicago.  The  10  cars  shipped  via 
the  Burlington  were  graded  No.  2,  while  eight  cars  of  the  same 
shipment,  routed  over  other  lines  were  graded,  five  rejected  and 
three  unmerchantable.  This  dissatisfaction  with  the  inspection 
service  grew  more  pronounced  and,  in  November,  it  was  stated  that 
the  grain  business  was  very  dull,  and  that  the  commission  men 
had  but  few  orders,  and  this  condition  was  laid  to  the  inspection 
system,  which  it  was  said  had  almost  driven  business  from  Chicago. 
Another  source  of  complaint  was  the  railroad  discrimination,  and  in 
December  the  directors  were  petitioned  to  appoint  a  committee  to 
investigate  this  subject.  The  petition  was  complied  with  and  E.  B. 
Stevens,  Robert  Warren  and  C.  L.  Raymond  were  appointed. 

The  new  rules  adopted,  in  March,  were  not  entirely  satisfactory, 
and  before  they  had  been  in  existence  more  than  a  few  weeks  pro- 
posals to  amend  them  were  made.  It  was  thought  best,  however, 
to  give  them  a  further  trial,  but  September  25  a  number  of  amend- 
ments were  adopted.  Rule  1,  Section  1,  was  amended  to  abolish 
the  Committee  of  Reference ;  Rule  2,  Section  2,  was  amended  to 
empower  the  President  to  suspend  for  disorderly  conduct,  subject 
to  appeal  to  the  Board  of  Directors ;  the  suspension  by  the  President 
to  be  effective  during  an  appeal.  Rule  8,  Section  1,  was  amended  to 
read :  "Provided,  that  in  case  of  default  on  contracts  for  future 
delivery,  if  it  shall  not  be  shown  that  the  seller  had  provided  by  a 
previous  purchase  of  the  property  for  delivery  on  his  contract,  he 
shall  in  the  judgment  of  the  committee  be  liable  to  pay,  as  penalty 
for  such  default,  damages  not  exceeding  5  per  cent  of  the  value  of 
the  property  sold.  In  case  either  party  shall  so  demand,  by  pre- 
vious notice  given  to  the  Secretary,  the  testimony  and  proceedings 
of  the  Committee  of  Arbitration  shall  be  taken  by  a  stenographer 
and  the  expense  shall  be  assessed  by  the  committee  as  in  case  of 
other  costs  incurred.  Section  4,  Rule  8,  was  amended  to  make  five 
a  quorum  of  the  Committees  on  Arbitration  and  Appeals,  the  action 
of  the  majority  of  a  quorum  to  be  binding.  A  number  of  other  minor 
changes  in  the  rules  were  also  made. 


[1875]  OF  THE  CITY  OF  CHICAGO  519 

An  important  ruling  was  made  by  Judge  Rogers  in  October, 
in  the  Follansbee  case,  in  which  the  power  of  the  Board  of  Directors 
to  suspend  was  sustained,  and  it  was  held  that  a  discharge  in  bank- 
ruptcy did  not  meet  the  requirements  of  the  rules  of  the  Board  of 
Trade,  and  was  no  bar  to  their  enforcement.  The  judge  said  in 
his  opinion :  "It  is  absolutely  essential  to  the  well-being  and  exist- 
ence of  associations  of  this  kind  that  its  members  should  be  held 
to  a  strict  observance  of  their  duties  as  members,  and  that  the 
penalties  imposed  for  breach  of  such  duties  should  be  enforced." 
The  year  1875  was  a  great  contrast  to  the  preceding  year  in  the 
matter  of  corners,  the  only  one  of  importance  being  in  the  wheat 
market  in  October.  Of  this  corner  it  was  said  :  "The  arrangements 
for  a  corner  in  October  were  as  nearly  perfect  as  could  be  and,  but 
for  the  existence  of  the  rule  against  corners,  would  have  resulted 
in  one  of  the  biggest  "squeezes"  on  record  in  the  history  of  the 
Board  of  Trade.  As  it  was,  the  long  party  was  willing  to  settle 
at  not  more  than  about  4  cents  above  the  price  for  November,  and 
nearly  all  the  outstanding  shorts  were  closed  up  within  the  margin." 

During  1875  improvements  to  the  extent  of  about  $200,000  were 
made  at  the  Union  Stock  Yards.  These  consisted  of  new  yards, 
pens,  chutes  and  a  handsome  new  exchange  building  50x137  feet. 
There  were  twenty  acres  of  cattle  pens  added,  and  ten  acres  of 
covered  hog  and  sheep  pens.  A  postoffice  and  printing  office  were 
also  established. 

During  the  year  a  law  was  passed  by  Congress  authorizing  the 
establishment  of  a  branch  mint,  and  Chicago  was  very  desirous  of 
being  chosen  as  the  location.  At  the  request  of  Dr.  A.  R.  Linder- 
man.  Director  of  the  United  States  Mint,  for  information  concern- 
ing Chicago,  President  Armour  appointed  a  committee  consisting 
of  E.  W.  Blatchford,  Louis  Wahl,  John  C.  Dore,  Murry  Nelson  and 
Andrew  J.  Marble,  who  compiled  some  very  interesting  statistics 
concerning  the  city,  which  were  published  as  an  appendix  to  the 
Secretary's  report  for  the  year  1875.  In  this  report  the  population 
of  Chicago,  November,  1875,  was  estimated  at  435,000;  the  banking 
capital  was  given  as  $24,431,000,  and  the  trade  of  the  city  with  the 
bullion-producing  states  and  territories  was  given  as  $30,000,000. 
An  exhaustive  statement  of  the  transportation  facilities  was  made, 
and  it  was  stated  that  there  were  eighteen  trunk  lines  of  railroad  cen- 
tering in  the  city.  Relative  to  wages,  the  following  statement  was 
made  as  to  the  average,  per  day:  Machinists,  $2@2.50;  black- 
smiths, $1.50@1.75 ;  millwrights,  $2@3 ;  carpenters,  $1.75@2.25; 
bricklayers,  $2.25@2.75 ;  laborers,  $1.25@1.50;  coopers,  $2@2.50; 
teamsters  and  teams,  $3.50@4;  house  servants,  $2@4  per  week. 
The  cost  of  Indiana  and  Illinois  coal  was  given  at  $2.90  per  ton 
on  the  cars,  Chicago.  Anthracite  coal  was  quoted  from  $6.25  to  $7 
per  ton.  The  price  of  potatoes  was  given  at  from  25  to  40  cents 
per  bushel,  and  flour  from  $4.50  to  $7  per  barrel. 


520  HISTORY  OF  THE  BOARD  OF  TRADE  [1875] 

The  produce  trade  in  1875  stood  out  in  marked  contrast  to  that 
of  the  preceding  years,  exhibiting  an  actual  decrease  of  17  per  cent 
in  volume  as  compared  with  1874,  as  well  as  a  decrease  in  currency 
value.  The  course  of  trade  was,  however,  satisfactory  on  the  whole 
and  very  even.  Fair  prices  were  realized  for  most  descriptions  of 
produce,  and  fluctuations  were  less  rapid  and  severe  than  pre- 
viously, while  very  few  failures  of  importance  occurred.  Corners 
in  the  former  acceptation  of  the  word  were  things  unknown,  except 
as  matters  of  history. 

Chicago  did  her  full  share  in  handling  the  products  of  the 
great  West,  and  gained  on  her  competitors  in  some  respects ;  more 
confidence  being  manifested  in  the  character  of  her  wares  than 
ever  before.  There  were  causes  for  the  apparent  retrogression 
above  noted.  The  crops  of  Europe  were  unusually  good  in  1874, 
with  a  fair  yield  in  1875,  so  that  the  people  on  the  other  side  of  the 
Atlantic  needed  less  of  our  breadstuffs  than  in  former  years.  Then, 
too,  the  absence  of  corner  excitements  on  the  scale  previously  wit- 
nessed, did  not  invite  to  a  rapid  shipment  hither,  and  especially 
did  not  create  high  pressure  diversions  from  other  interior  markets. 

Provisions 

The  market  for  provisions  was  very  active  during  the  greater 
portion  of  the  year,  even  the  summer  months  being  marked  by  con- 
siderable excitement.  As  a  consequence  high  prices  were  the  rule, 
but  the  fluctuations  were  not  so  severe  as  in  several  prior  seasons. 
The  trade  was  well  controlled  by  capitalists  during  the  greater 
part  of  the  year,  and  they  made  money,  while  the  parties  who 
operated  on  the  other  side  were  generally  the  losers.  The  chief 
exception  to  this  rule  was  in  the  case  of  lard. 

The  business  of  the  year  was  usually  considered  as  dividing  on 
the  summer  and  autumn,  instead  of  the  winter,  for  the  reason  that 
the  winter  was  the  time  of  the  greatest  activity  in  packing,  which 
invited  activity  in  trade.  It  is  difficult,  therefore,  to  compare  the 
business  of  two  calendar  years.  But  the  difficulty  was  not  so  great 
as  formerly,  as  there  was  a  growing  tendency  to  spread  the  trading 
over  the  whole  twelve  months,  as  well  as  to  pack  during  the  summer. 
The  packing  season  of  1875-76  showed  a  decrease  throughout  the 
entire  Mississippi  Valley,  the  grand  total  being  nearly  700,000  less 
than  in  the  preceding  year.  In  Chicago  the  decrease  was  98,000,  the 
number  of  hogs  packed  being  1,592,065.  Cincinnati  and  Indiana- 
apolis  gained  somewhat,  but  St.  Louis,  Milwaukee,  Louisville  and 
St.  Joseph  lost,  while  Omaha  and  Kansas  City  were  nearly  station- 
ary. Chicago  maintained  its  supremacy,  however,  with  more  than 
a  million  to  its  credit  over  Cincinnati,  its  nearest  competitor.  Live 
stock  receipts  in  Chicago  were :  Cattle,  920,843  ;  shipments,  696,534 ; 
hogs,  receipts,  3,912,110,  and  shipments,  1,582,643. 


[1875]  OF  THE  CITY  OF  CHICAGO  S21 

Mess  Pork 

There  was  a  heavy  speculative  movement  in  pork  in  the  winter 
of  1874-5,  which  carried  prices  up  and  largely  stimulated  its  pro- 
duction. The  article  was  bought  chiefly  by  country  dealers  in  hogs, 
who  got  out  of  the  deal  soon  after  the  close  of  the  packing  season. 
The  market  then  weakened  and  ruled  very  dull  till  a  prominent 
packer  took  hold  and  worked  off  a  rather  large  stock  into  the  hands 
of  consumers  while  running  an  operation  which  looked  very  much 
like  a  corner,  though  he  stoutly  protested  it  was  nothing  of  the  kind. 
The  market  opened  at  $19,  declined  to  $17.70  in  the  latter  part  of 
January,  touched  $18.50,  the  first  week  in  February,  declined  to  $18 
at  the  end  of  the  month,  rose  to  a  little  over  $22  at  the  end  of  April, 
then  broke  down  to  $18.50  in  June.  It  rallied  from  that  point  up  to 
$22  in  July,  fell  back  to  $20  in  August,  and  then  advanced  to  the 
neighborhood  of  $23.50  at  the  close  of  September.  The  new  pork 
opened  at  about  $21  and  declined  to  $18.80  in  December,  then 
advanced  to  $19.10  at  the  close  of  the  year. 

Lard 

Ruled  much  steadier  than  the  previous  year,  though  the  subject 
of  much  speculation.  Encouraged  by  the  experience  of  1874,  when 
there  was  a  big  demand  from  European  consumers  and  for  home 
use,  a  prominent  operator  undertook  to  control  the  market,  but 
was  unable  to  do  so,  as  the  European  market  was  well  supplied,  and 
it  was  impossible  to  realize  at  high  prices,  and  the  operation 
involved  considerable  loss.  Later  the  market  was  steady.  It 
opened  at  $13.15@13.20  per  100  pounds,  advanced  to  $13.50  the  mid- 
dle of  January,  and  to  $13.75  the  first  week  in  February,  receding  to 
$13,123^  at  the  close  of  the  packing  season.  It  then  strengthened 
to  $15.75  in  the  last  half  of  April,  and  fell  to  $13  at  the  beginning 
of  June.  It  rose  to  $14  the  first  half  of  July,  settled  to  $12.75  in 
September,  advanced  to  $13.75  at  the  close  of  October,  falling  to 
$12.10  the  first  week  in  December  and  closed  at  $12.15. 

Wheat. — The  movement  of  wheat  through  Chicago  was  less 
than  in  1874,  though  the  trading  was  larger  in  1875  than  in  any 
previous  year  in  the  history  of  the  trade.  The  market  took  nearly 
the  same  range.  No.  2  varying  from  83j4  cents  to  $1.31,  being  a 
difTerence  of  nearly  48  cents  between  the  highest  and  lowest  prices 
of  the  year,  on  the  speculative  grade.  A  much  larger  percentage  of 
the  new  crop  inspected  into  the  lower  grades  than  in  any  previous 
year  since  the  days  of  "stumptail."  During  the  first  month  of  re- 
ceipts on  the  new  crop  the  aggregate  for  Nos.  1  and  2  spring  was 
barely  more  than  39  per  cent  of  the  whole ;  by  the  close  of  October 
it  had  slowly  improved  to  a  little  more  than  60  per  cent. 

The  market  for  No.  2  spring  opened  in  January  at  90j^  cents, 
and  declined  to  83^  cents  in  the  middle  of  February.    Just  as  nearly 


522  HISTORY  OF  THE  BOARD  OF  TRADE  [1875] 

every  one  was  expecting  a  further  drop  to  75  cents,  it  took  an 
upward  turn  and  touched  $1.06j4  in  April,  being  chiefly  influenced 
by  fear  for  the  condition  of  the  winter  wheat.  It  fell  back  to  99 
cents  that  month,  and  to  89  cents  by  the  close  of  May.  The  market 
was  very  irregular  during  June  at  90^  cents  to  $1.02i/2,  and  then 
rose  to  $1.31  the  first  week  in  August;  the  prices  fluctuating  up  and 
down  five  cents  in  one  day,  amid  the  most  intense  excitement  caused 
by  reports  of  great  damage  to  the  crops  by  storms  in  Europe.  The 
market  dropped  to  ^l.OSyi  during  the  next  six  weeks.  From  the 
middle  of  September  to  the  end  of  October  it  was  steadied  by  the 
small  receipts  of  the  speculative  grade,  which  resulted  in  a  "squeeze" 
in  "October"  wheat,  the  closing  price  being  $1.13@1.13>2.  The 
market  receded  to  $1.08  and  ruled  steady  during  the  first  three 
weeks  of  November,  the  lowest  point  being  $1.04j4-  Then  the 
report  of  31,000,000  bushels  in  sight  in  Europe  with  nearly  19,000,000 
bushels  in  the  United  States  (not  including  the  Pacific  coast  or 
southern  states)  caused  a  break  to  99  cents  the  first  week  in  Decem- 
ber, then  to  93^  cents  and  closed  firmer  at  96)4  cents. 

Com 

The  course  of  the  corn  market  was  a  disappointment  to  every- 
body in  the  trade.  The  crop  of  1874  was  only  a  fair  one,  not  so 
large  as  that  of  the  year  preceding,  and,  at  the  close  of  1874,  the 
old  corn  had  been  well  cleaned  out  of  the  country  by  extraordinary 
stimulus  of  high  prices.  The  Sturges  deal  through  a  great  part  of 
the  summer,  and  the  Canadian  corner,  which  culminated  in  Decem- 
ber at  80@85  cents  per  bushel,  had  kept  the  prices  unnecessarily 
high  in  Chicago,  and  drawn  every  bushel  of  corn  that  could  be  sent 
to  the  market.  For  several  years  preceding  there  had  generally 
been  a  considerable  stock  of  old  corn  in  the  hands  of  growers  when 
the  new  corn  commenced  to  move.  That  reserve  had  been 
exhausted  at  the  close  of  1874.  Hence  there  was  an  inevitable  falling 
of?  in  the  volume  of  business  during  1875,  and  there  was  another 
consequence.  The  consumptive  demand  had  seemed  to  increase 
more  rapidly  than  the  area  of  corn  culture,  from  which  it  was  argued 
that  corn  was  good  speculative  property,  and  large  amounts  of 
capital  were  invested  in  it  early  in  the  year.  The  corn  of  the  West 
was  generally  held  back  for  better  prices  than  were  then  ruling,  and 
the  forward  movement  was  very  light  during  the  last  months  of 
winter,  the  demand  from  New  England  and  New  York  being  sup- 
plied by  the  surplus  in  the  states  south  of  New  Jersey. 

The  speculative  movement  received  an  additional  impetus  when 
the  late  cold  spring  destroyed  the  hopes  of  many  farmers,  and  the 
following  summer  was  voted  anything  but  favorable  to  a  good  corn 
crop.  It  was  known  that  the  area  of  culture  was  very  large,  hav- 
ing been  materially  increased  by  late  planting  of  corn  on  fields 
where  wheat  had  failed  to  come  up.    But  it  was  generally  expected 


[1875]  OF  THE  CITY  OF  CHICAGO  523 

that  this  would  be  more  than  compensated  by  a  falling  off  in  the 
yield  on  account  of  excessive  moisture  and  low  temperature,  espe- 
cially in  the  bottom  lands,  which  had  hitherto  been  the  most  fertile 
sections. 

The  market  for  No.  2  averaged  63^  cents  in  1875,  the  average 
being  65@68  cents  up  to  the  end  of  October.  The  market  opened 
in  January  at  66  cents,  declined  to  61^  cents  the  first  half  of  Febru- 
ary, rose  to  76Y2  cents  at  the  end  of  April,  sold  down  to  60>4  cents 
at  the  close  of  May,  up  to  70^  cents  in  the  middle  of  June,  and  to 
76>4  cents  the  last  half  of  July,  and  then  declined  almost  steadily 
to  46  cents  early  in  December,  and  closed  irregularly  at  50@53j^ 
cents.  There  was  no  "squeeze"  until  the  last  of  the  year,  though 
one  was  often  expected.  On  the  last  day  of  December  the  "shorts" 
were  compelled  to  settle  at  an  advance  of  4  cents  over  the  price  of 
the  previous  day,  and  about  10  cents  over  the  price  of  "seller 
January." 

Oats. — The  oat  market  was  a  peculiar  one,  but  sympathized  in 
a  remarkable  manner  with  corn  almost  throughout.  The  market 
had  been  extensively  manipulated  during  the  latter  part  of  1874, 
and  that  fact  left  it  in  a  demoralized  condition  at  the  beginning  of 
the  new  year,  the  majority  of  operators  not  knowing  what  to  do. 
Prices  had  been  well  kept  up,  which  augured  a  decline,  but  the 
forward  movement  had  also  been  a  free  one,  and  it  was  believed 
that  the  crop  would  be  well  cleaned  up  before  new  oats  were  ready 
to  use,  for  which  reason  the  bears  were  afraid  to  sell  the  market 
down.  The  market  was  dull  during  the  remainder  of  the  winter, 
with  a  very  light  rail  movement  eastward,  and  little  trading,  except 
as  a  heavy  demand  was  gradually  developed  for  May  delivery,  the 
market  being  kept  firm  by  the  small  volume  of  the  stocks  in  store. 
The  clique  which  tried  to  manipulate  the  market  in  June  were  not 
very  successful,  and  the  long  side  was  even  more  unfortunate  in 
July,  when  the  market  went  down  persistently  and  heavily,  in  spite 
of  the  cry  that  the  crop  was  drowned  out,  and  there  would  be  com- 
paratively few  oats  after  the  old  were  exhausted.  The  party  who 
had  tried  to  control  the  market  went  under,  and  then  some  of  those 
who  had  been  on  the  short  side  through  the  summer  turned  around 
and  worked  the  other  way,  through  August,  September  and  a  part 
of  October,  under  the  slowly  declining  prices.  The  August  deal 
was  a  very  large  one,  at  least  5,000,000  bushels  of  shorts  being  put 
out  for  that  month,  and  some  parties  in  Indiana  made  a  good  deal 
of  money  on  the  long  side,  which  partly  compensated  their  losses  in 
wheat.  The  new  crop  was  a  large  one,  fully  5  per  cent  greater 
than  that  of  1874,  but  it  moved  slowly.  The  wet  season  had  made 
an  unusual  growth  of  straw,  so  that  the  oats  cured  slowly,  and 
could  not  be  passed  through  the  thresher  as  rapidly  as  heretofore. 
The  latter  difficulty  existed  the  remainder  of  the  year,  and  the  rela- 
tively low  price  gave  but  little  inducement  to  farmers  to  market 


524  HISTORY  OF  THE  BOARD  OF  TRADE  [1875} 

them.  The  lower  price  of  oats  during  the  year  stimulated  consump- 
tion both  locally  and  in  the  East.  In  1875  the  average  price  was 
47  cents.  The  market  opened  at  about  52^  cents,  ruled  steady  at 
52@53  cents  till  near  the  middle  of  February,  then  slowly  advanced 
to  64%  cents  in  May,  fell  back  to  57%  cents  at  the  close  of  that 
month,  rose  to  63  cents  the  first  half  of  June,  under  a  corner  scare, 
receded  to  50)4  cents  two  or  three  weeks  later,  and  rose  to  62  cents 
in  July.  The  new  oats  sold  from  40J/2  cents  down  to  34  cents  in 
August,  then  up  to  40  cents  under  fears  of  a  corner,  and  gradually 
declined  to  29>4  cents  in  the  early  part  of  December,  and  closed 
at  30}i  cents. 

Rye 

The  market  for  rye  was  steady  during  the  whole  year,  under  a 
supply  which  scarcely  kept  pace  with  the  demand,  though  the 
latter  was  considerably  interfered  with  by  the  whiskey  troubles, 
which  closed  about  fifty-two  of  the  distilleries  for  some  months. 
There  was  a  large  falling  ofif  in  the  receipts  of  the  old  crop,  as 
compared  with  1874,  the  yield  of  that  year  having  been  a  light  one, 
owing  to  the  dry  weather,  so  that  there  was  not  much  to  be  drawn 
upon,  as  high  prices,  induced  by  short  sales,  had  attracted  large 
receipts  in  the  autumn  of  1874  and  the  early  winter.  The  season 
of  1875  was  a  backward  one,  making  the  new  crop  fully  one  month 
later  than  usual  in  starting  forward.  But  the  receipts  came  in 
freely  in  October,  and  during  the  remainder  of  the  year.  The  mar- 
ket ruled  high  on  the  old  crop,  prices  being  some  10  cents  per 
bushel  above  the  point  at  which  shipments  could  be  made  to  the 
East  during  the  summer  months,  but  there  was  a  good  demand  for 
the  supply  in  the  West,  with  sustained  quotations.  The  market 
opened  at  about  97%  cents,  fell  back  to  95  cents,  advanced  to  $1  in 
the  middle  of  February  and  to  $1.15  by  the  middle  of  April,  sub- 
sided to  $1.03><  later  in  the  month,  rose  to  $1.08  at  the  close  of 
April,  and  fell  ofif  irregularly  to  90  cents  early  in  July,  and  rose  to 
$1.02  by  the  middle  of  that  month,  when  the  new  crop  was  selling 
at  75  cents  for  August.  The  market  (on  new)  fluctuated  between 
80  and  88  cents  in  August,  then  declined  to  65  cents  in  November, 
and  advanced  to  69  cents  at  the  close  of  the  month.  Later  prices 
ruled  firm  at  67@68%  cents  most  of  the  time,  closing  at  67@67>^ 
cents.  The  average  price  for  No.  2  up  to  the  latter  part  of  July, 
when  the  new  came  on  the  market,  was  $1  per  bushel.  The  average 
for  the  whole  year  was  88)4  cents. 

Barley 

The  high  prices  which  prevailed  in  1874  encouraged  the  farmers 
to  sow  barley  in  1875,  and  led  to  heavy  "short"  selling,  under  the 
prospect  of  an  abundant  crop  and  reduced  consumption.  But  the 
yield  of  1874  was  light,  owing  to  the  drouth,  and  the  market  took 


{1875]  OF  THE  CITY  OF  CHICAGO  525 

an  unexpected  turn  upwards,  barley  being  relatively  scarce  early 
in  1875.  The  acreage  in  Nebraska,  Iowa,  Minnesota  and  Wis- 
consin exhibited  an  increase  of  25  to  33  per  cent,  and  the  yield  was 
a  heavy  one.  In  Nebraska  and  Iowa  the  crop  was  seriously  injured, 
and  in  some  places  almost  ruined  by  bad  weather  at  the  time  of 
harvest.  In  the  other  two  states  the  rains  did  not  occur  till  most 
of  the  barley  had  been  secured.  In  consequence  the  crop  of  the 
West  was  exceedingly  uneven,  that  from  the  southern  section  being, 
much  of  it,  little  better  than  "stumptail,"  while  the  northern  barley 
was  good.  The  crop  in  Ohio  was  only  one-third  of  an  average; 
that  state  and  Indiana  raising  about  2,500,000  bushels  between  them. 
Ohio  parties  bought  rather  freely  in  the  Chicago  markets  soon  after 
the  harvest  to  supply  their  own  deficiencies,  which  caused  an 
advance,  and  that  constituted  the  bulk  of  the  shipping  demand  for 
the  new  crop.  During  the  first  part  of  the  year  prices  were  sus- 
tained, irregularly,  by  the  fear  that  the  crops  would  be  ruined  by 
bad  weather,  the  fear  being  strongest  in  May  and  June.  After- 
wards it  ruled  weak,  and  the  last  few  months  of  the  year  the  mar- 
ket was  a  fearful  slough  of  despond,  that  for  No.  2  being  entirely 
artificial,  while  the  lower  grades  were  unsalable  except  at  prices 
that  were  low  even  for  chicken  feed.  No.  3  was  discounted  fully 
30  cents  from  the  price  of  the  speculative  grade.  The  market  for 
No.  2  opened  at  about  $1.24,  and  ruled  at  $1.23@1.33  during  Janu- 
ary, declined  to  $1.01  in  March,  advanced  to  about  $1.37  near  the 
close  of  May,  weakened  to  $1.15  in  June,  at  which  time  September 
sold  at  96  cents  to  $1 ;  advanced  to  $1.40  in  the  middle  of  June  (with 
September  at  $1.07)  and  weakened  to  $1.15  at  the  end  of  that  month. 
September  the  market  rose  to  $1.13  and  fell  ofi'  irregularly  to  81 
cents  in  November,  then  advanced  to  89  cents  at  the  close  of  that 
month,  fell  ofif  to  84j/^  cents  and  rose  to  88  cents,  receding  to  81 
cents  at  the  close  of  the  year.  The  average  price  of  No.  2  for  the 
year  was  about  $1.26. 

Flour 

As  early  as  1875  Chicago  flour  interests  began  to  feel  the 
effects  of  direct  lake  shipments  of  the  Minnesota  and  Wisconsin 
product  via  Milwaukee.  The  receipts  for  the  year  were  2,625,883 
barrels,  a  decrease  of  40,796  barrels  as  compared  with  the  previous 
year.  Prices  were  about  the  same,  but  good  milling  wheat  was 
higher,  leaving  a  smaller  margin  of  profit.  Winter  wheat  flours 
were  beginning  to  lose  favor  and  the  comparatively  new  "Minne- 
sota Patents"  were  sought  by  the  best  trade.  Chicago  flour  exports 
were  2,285,113  barrels,  and  the  amount  manufactured  in  the  city 
was  249,653  barrels,  an  increase  of  nearly  5,000  barrels  as  com- 
pared with  1874,  though  still  showing  a  decrease  from  the  days 
before  the  fire,  being  almost  200,000  barrels  less  than  in  1870. 


526  HISTORY  OF  THE  BOARD  OF  TRADE  [18761 

Seeds 

The  production  of  flaxseed  was  largely  increased  and  prices 
ranged  from  $2.25  in  April  to  $1.15  in  October.  Total  seed 
receipts  were  75,885,230  pounds,  while  shipments  were  more  than 
20,000,000  pounds  less. 

Hides 

The  shipments  of  hides  exceeded  the  receipts  by  more  than 
3,000,000  pounds,  the  figures  being,  receipts,  52,357,244  pounds,  and 
the  shipments,  55,867,904  pounds.  Prices  for  "Dry  Flint"  hides 
ranged  from  18@19  cents  the  first  of  the  year  to  15  cents  in  Decem- 
ber. "Dry  salted"  from  16@17  cents  in  January  to  12  cents  in 
December  and  "Green  salted"  from  8^@9i^  cents  to  7^  cents. 

Lumber 

The  lumber  trade  showed  a  considerable  increase,  and  Chicago 
still  maintained  its  place  as  one  of  the  leading  lumber  markets  of 
the  world.  Prices  were  low  and  the  margin  of  profits  small,  but 
the  volume  of  business,  the  greatest  since  1872,  made  the  trade 
fairly  satisfactory.  The  receipts  of  lumber  for  1875  were  1,147,- 
193,432  feet. 

Transportation 

Lake  freights  on  wheat  by  sail  were  5@5j^  cents  per  bushel 
to  BuiTalo  at  the  opening  of  navigation  early  in  April,  but  soon 
receded,  at  no  time  after  June  exceeding  4^/  cents  and  being  as 
low  as  2^4  cents  in  August.  In  October  they  were  up  to  6  cents 
and  at  the  close  of  navigation  5j^@7  cents.  Lake  (steam)  and  rail 
freights,  via  Bufifalo,  to  New  York,  on  wheat,  per  bushel,  varied 
from  15  cents  in  May  to  11  cents  in  August,  rising  to  21  cents  the 
last  of  the  season.  All  rail  freights  on  wheat  per  100  pounds  to 
New  York  were  40  cents  in  January,  but  were  reduced  to  30  cents 
in  October,  rising  to  45  cents  in  December. 

1876 

One  of  the  first  duties  of  1876  was  to  settle  the  deals  arising 
from  the  corner  in  corn  with  which  the  year  1875  had  ended.  It 
was  found  that  there  was  a  much  greater  quantity  of  outstanding 
liabilities  than  had  been  generally  thought.  There  was  about 
1,100,000  bushels  which  had  been  defaulted  upon  to  four  men  alone, 
and  there  were  several  others  on  the  long  side  who  did  not  receive 
what  the  short  sellers  had  agreed  to  deliver.  It  was  not  until  March 
that  the  Arbitration  Committee  fixed  the  settlement  price  at  48 
cents  per  bushel.  As  the  market  price  the  last  of  the  year  was  53 
cents,  the  longs  were  dissatisfied  with  this  decision,  and  threatened 
to  appeal,  but  they  were  met  with  the  counter  proposition  that  if 
they  did  so  they  might  be  disciplined  for  running  a  corner.    At  the 


[1876]  OF  THE  CITY  OF  CHICAGO  527 

election  held  on  January  4,  A.  M.  Wright  received  438  votes  for 
President  and  John  R.  Bensley  538,  and  this  was  hailed  as  a  vic- 
tory for  "reform."  The  annual  meeting  was  held  a  week  later, 
with  President  Armour  in  the  chair.  Secretary  Randolph  read  the 
report,  showing  that  the  membership  was  1851  and  that  the  assets 
had  increased  to  $178,808.71.  The  receipts  for  1875  were  $140,- 
057.66,  and  the  expenditures  $116,727.  Subsequent  to  passage  of 
the  rule  raising  the  initiation  fee  from  $250  to  $1,000,  and  before 
the  latter  rate  took  effect,  254  new  members  were  received ;  after 
that  time  there  were  no  new  members,  but  memberships  had  been 
made  transferable  and  142  transfers  were  recorded.  Speaking  of 
the  changes  in  the  rules,  the  Directors'  report  said :  "The  most 
radical  changes  which  affect  the  business  relations  of  the  members 
are  in  respect  to  the  manner  of  depositing  margins  or  security  on  ■ 
contracts,  so  that  perfect  security  may  be  had  against  any  probable 
contingency  that  may  arise  touching  the  solvency  of  either  party 
to  such  contracts,  and  in  relation  to  the  adjustment  of  balances  due 
on  defaulted  contracts.  In  previous  years,  and  under  the  operation 
of  our  former  Code  of  Rules,  it  was  in  the  power  of  combinations, 
or  of  an  individual,  under  circumstances  which  were  found  quite 
too  frequently  to  exist,  to  extort  damages  on  account  of  the  non- 
fulfillment of  a  contract  entirely  out  of  proportion  to  the  damages 
really  sustained.  The  practice  of  manipulating  our  markets  to  effect"^ 
these  selfish  ends  had  in  some  cases  developed  to  such  proportions  ' 
that  it  had  come  to  threaten  the  good  name  of  the  Association, 
especially  in  quarters  where  the  only  features  of  the  transaction  i 
that  were  known  were  those  of  an  offensive  character.  This  condi-  ^ 
tion  of  things  induced  a  large  majority  of  our  members  to  desire 
that  the  Board  should  no  longer  be  made  the  vehicle  of  enforcing 
the  collection  of  damages  which,  but  for  the  character  of  our  rules, 
would  not  be  recognized  as  proper  or  equitable  by  any  court  of 
law.  The  reaction  of  sentiment  in  regard  to  this  subject  as  devel- 
oped in  our  revised  code  of  March  last  was  extreme,  and  approached 
error  of  almost  equal  proportions  in  the  opposite  direction.  Some 
slight  changes  were  made  in  the  later  revision,  intended  to  check 
the  growing  tendency  to  contract  for  the  delivery  of  property, 
apparently  in  good  faith,  but  with  a  design  to  utterly  neglect  to 
make  any  provision  for  the  specific  fulfillment  of  such  contracts, 
unless  it  should  prove  to  be  to  the  interest  of  the  seller  so  to  do." 
The  Directors  admitted  that  the  rules  then  in  force  were  not  as 
direct  and  certain  as  was  desirable,  and  recommended  further  con- 
sideration. President  Armour  spoke  feelingly,  thanking  the 
Directors  and  members  for  their  co-operation  during  the  year  of 
his  administration,  and  he  was  followed  by  John  R.  Bensley,  the 
new  President.  Mr.  Bensley  was  enthusiastically  applauded  when 
he  said :  "The  first  principle  that  underlies  confidence  in  us  is 
that  of  the  inviolability  of  any  contract  between  the  members  of 


528  HISTORY  OF  THE  BOARD  OF  TRADE  [1876] 

this  Board.  While  I  am  no  friend  to  any  rule  that  would  put  our 
members  in  jeopardy  of  becoming  the  victims  of  a  conspiracy  to 
extort  money,  yet  better  by  far  all  the  corners  that  would  occur, 
with  their  consequent  disaster  to  some,  than  that  we  should  inscribe 
upon  our  escutcheon  the  damaging  heresy  of  even  partial  repudia- 
tion. But  neither  of  the  two  extremes  is  desirable  or  necessary." 
One  of  the  provisions  of  the  new  rules  was  the  increase  of  the 
Board  of  Directors  from  ten  to  fifteen,  as  the  additional  members, 
M.  S.  Kingsland,  C.  H.  Blackman,  P.  P.  Oldershaw,  A.  J.  Marble 
and  A.  E.  Clark,  had  been  elected.  At  the  election  of  1876  five  addi- 
tional Directors  were  chosen  to  serve  for  three  years,  they  were : 
J.  H.  Norton,  H.  W.  Rogers,  Jr.,  A.  N.  Young,  J.  H.  Hurlburt  and 
R.  W.  Dunham.  Josiah  Stiles  was  elected  second  Vice-President, 
and  D.  H.  Lincoln  became  First  Vice-President  by  succession.  In 
connection  with  the  discussion  of  the  rules  at  the  annual  meeting 
a  decision  of  the  Supreme  Court  rendered  later  in  January  is  of 
interest.  This  opinion  was  delivered  by  Justice  Walker  in  the  case 
of  Lyon  vs.  Culbertson,  growing  out  of  the  wheat  deal  in  1872.  The 
action  was  based  on  the  following  agreement:  "Chicago,  Aug.  1, 
1872. — We  have  this  day  bought  of  Culbertson,  Blair  &  Company, 
10,000  bushels  of  No.  2  spring  wheat,  in  store,  at  $1,573/2  per  bushel, 
to  be  delivered  at  sellers'  option  during  August,  1872."  The  mar- 
ket closed  at  $1.11  J/  and  the  lower  court  rendered  a  verdict  for  the 
amount  claimed.  This  was  reversed  by  the  Supreme  Court,  which 
ruled  that  any  regulation  of  the  Board  of  Trade  as  to  futures,  where 
actual  delivery  was  not  contemplated,  was  void. 

^  The  question  of  railroad  discriminations  was  a  burning  one  at 
this  time,  not  only  with  the  members  of  the  Board  of  Trade,  but 
with  all  Chicago  business  men.  Editorially,  the  "Tribune"  on 
January  4  called  attention  to  the  fact  that  the  rate  on  flour  from 
Milwaukee  to  New  York  was  10  cents  less  than  from  Chicago  to 
New  York.  On  account  of  this  situation  much  importance  was 
attached   to  the   work  of  the   committee   appointed   by    President 

.^Armour  to  investigate  railroad  discriminations.  The  committee 
met  on  January  5,  with  E.  B.  Stevens  as  chairman  and  W.  T.  Baker 
as  secretary,  and  at  once  began  taking  evidence  from  commission 
men  and  others.  This  committee  did  conscientious  work  and 
adduced  a  large  amount  of  evidence  showing  how  Chicago  suf- 
fered on  account  of  the  arbitrary  rates  imposed.  So  effective  were 
their  labors  that  on  February  5  it  was  reported  that  the  railroad 
pool  which  had  discriminated  against  Chicago  was  about  to  break 
up.  Concerning  the  report  of  this  committee,  on  February  8  the 
Chicago  "Tribune",  said,  in  substance :  "The  report  of  the  Board 
of  Trade  Committee  on  Railroad  Discriminations  shows  hard  work. 
Its  conclusions  are  based  on  testimony  of  shippers  and  railway 
men  and  cover  several  hundred  pages.  It  makes  out  a  perfect 
case  against  the   railroads,   which   have  been   suspected   of   unfair 


[1876]  HISTORY  OF  THE  BOARD  OF  TRADE  529 

dealing,  and  it  only  remains  now  for  the  business  interests  of 
Chicago  to  unite  in  resenting  it  and  in  coercing  a  correction  of  the 
abuses."  The  report  placed  the  blame  upon  the  railroad  pool,  and 
said  that  the  main  condition  of  the  combination  was  that  the 
Chicago  rate  should  be  inflexible,  leaving  the  roads  to  prorate  with 
the  cross  lines  at  interior  points  to  the  West,  South,  Southwest 
and  Northwest  of  Chicago,  so  that  interior  points,  equi-distant  with 
Chicago  from  the  seaboard,  could  send  their  freight  at  much  lower 
rates,  and  even  points  further  away  could  ship  for  less  money.  It 
was  declared  that  this  state  of  affairs  was  made  possible  by  con- 
cessions to  other  points,  by  prorating  and  rebating,  and  by  under- 
billing  or  over-weighing.  The  committee  recommended  the  forma- 
tion of  an  association  for  the  protection  of  Chicago  shipping  inter- 
ests, similar  to  the  Cheap  Transportation  Association  of  New  York, 
the  establishment  of  a  steamship  line  between  Chicago  and  Grand 
Haven,  to  connect  with  the  Detroit  &  Milwaukee  Railway,  and  also 
the  encouragement  of  the  Grand  Trunk  to  extend  its  lines  to  Chi- 
cago. The  report  was  signed  by  E.  B.  Stevens,  William  T.  Baker, 
W.  J.  Pope,  Josiah  Stiles  and  P.  W.  Dater.  Following  the  pub- 
lication of  this  report  representatives  of  all  the  railways  leading 
into  Chicago  met  at  the  Grand  Pacific  Hotel  to  find  a  way  of  stop- 
ping discriminations.  At  this  meeting  a  committee  was  appointed 
to  report  a  schedule  of  rates  based  on  actual  mileage,  and  these 
rates  were  adopted.  Complaint  was  made  that  the  Board  of  Trade 
Committee  on  Discriminations  had  met  with  no  co-operation  from 
the  warehousemen  in  their  effort  to  reduce  the  cost  of  handling 
grain  in  Chicago.  It  was  stated  that  the  warehousemen  refused 
to  lower  their  rate,  and  that  a  pool  existed,  some  elevators  receiving 
no  grain  but  sharing  in  the  profits  of  the  pool.  The  storage  rates 
were  two  cents  per  bushel,  and  other  charges  were  switching,  $2 
per  car;  loading,  $1  per  car,  and  inspection,  thirty  cents  per  car, 
making  a  total  of  about  three  cents  per  bushel.  The  railroads 
agreed  to  abolish  the  charges  for  switching  and  loading,  but  the 
warehousemen  would  make  no  reduction.  The  Board  of  Trad^ 
asked  for  a  rate  of  one  cent  per  bushel  for  seven  days,  to  be  paid  by 
the  railroads.  On  February  25  the  Board  of  Trade  Transportation 
Committee  met  and  invited  the  Grocers'  Exchange,  the  Lumber- 
men's Association  and  leading  wholesalers  and  jobbers  to  meet  with 
the  committee  to  form  a  Transportation  Association,  as  it  was 
charged  that  the  new  tariff  adopted  by  the  railroads  was  for  effect 
only,  and  that  there  was  never  any  intention  to  adhere  to  it.  It  is 
not  recorded  that  this  agitation  had  any  particular  effect  upon  rail- 
road rates,  although  they  were  very  low  immediately  after  this 
action.  In  April  a  charter  was  made  for  40,000  bushels  of  wheat 
from  Chicago  to  Liverpool,  at  the  rate  of  41^  cents  per  100  pounds, 
which  was  considered  very  low.  With  the  opening  of  the  Straits  ^ 
of  Mackinac  a  great  grain  fleet  set  sail  from  the  Chicago  harbor. 


530  HISTORY  OF  THE  BOARD  OF  TRADE  [1876] 

-This  fleet  carried  550,000  bushels  of  wheat,  1,500,000  bushels  of 
corn,  300,000  bushels  of  oats,  and  30,000  bushels  of  rye,  a  total  of 
2,380,000  bushels,  and  there  were  also  1,200  cars  shipped  by  rail  to 
Boston,  Baltimore  and  Philadelphia.  This  was  proclaimed  as  being- 
the  largest  shipping  movement  Chicago  had  known. 

Aside  from  the  course  of  the  markets  and  the  minor  incidents 
constantly  connected  with  similar  institutions,  the  interest  of  the 
Board  of  Trade  was  centered  largely  upon  the  inspection  service, 
the  warehouse  question,  and  the  difficult  adjustment  of  the  rules 
relative  to  contracts  for  future  delivery,  in  order  to  arrive  at  an 

.^equitable  degree  of  protection  for  both  buyers  and  sellers.  Following 
the  course  of  the  inspection  troubles  during  the  year,  in  February 
there  was  a  court  decision  affecting  the  status  of  assistant  inspectors. 
An  Indiana  shipper  was  charged  with  offering  a  small  bribe  to  an 
assistant  inspector  and  was  indicted.  His  attorney  raised  the  point 
that  an  assistant  inspector  was  not  an  officer  of  the  state  within 
the  purview  of  the  constitution,  and  this  objection  was  sustained 
by  the  court  and  the  indictment  quashed.  This  decision  left  the 
assistant  inspectors  without  any  standing  or  responsibility  as 
officers  of  the  state ;  and  so  general  was  the  dissatisfaction  with 
the  service  that  again  there  was  a  movement  among  the  members 
to  reinstall  Board  of  Trade  inspection,  making  grain  "regular"  for 
delivery  on  contracts  only  when  inspected  by  the  Board  of  Trade 
inspectors.  In  March  the  Directors  appointed  an  inspector  to 
examine  grain  sold  by  sample  when  desired  to  do  so,  the  charge 
being  fixed  at  40  cents  per  carload.  In  April  D.  Palmer  was 
appointed  by  the  Directors  as  grain  examiner,  this  title  being  used 
to  avoid  that  of  "inspector,"  so  as  not  to  conflict  with  the  state  law. 
His  duties  were  to  look  after  cargoes  of  grain  for  shippers  and  to 
watch  grain  sold  by  sample.  The  question  of  transactions  in  futures 
and  options  was  still  being  bandied  about  among  the  courts,  and  the 
Board  itself  was  struggling  to  adopt  just  rules  of  trade.  In  April 
a  resolution  was  presented  to  the  Directors  to  prohibit  the  selling  or 
J  buying  of  "puts"  or  "calls"  in  the  open  market  of  the  exchange 
room,  and  this  resolution  was  adopted  with  apparent  unanimity. 

fin  May  the  "Tribune"  stated  that  Chicago  was  losing  its  hold  as  a 
grain  market,  and  that  elevator  charges  must  be  lowered,  and 
changes  made  in  the  Board  of  Trade  rules.  "Under  the  operation 
of  well-enough-meant  rules  for  the  prevention  of  corners,"  continued 
the  "Tribune,"  "our  market  has  degenerated  into  a  machine,  which 
is  chiefly  run  in  the  interest  of  the  bears.  It  would  be  best  to  have 
it  so  conducted  that  it  would  favor  neither  side  at  the  expense  of  the 
other,  but,  if  it  must  lean  at  all,  it  is  evidently  to  the  interest  of  the 
city,  and  the  Northwest  as  a  producing  section,  that  it  should  tend 

;^lightly  upward,  rather  than  the  other  way." 

In  order  to  relieve  the  situation  somewhat  the  elevators  made 
a  special  storage  rate  of  one  cent  per  bushel  to  favored  shippers. 


^ 


[1876]  OF  THE  CITY  OF  CHICAGO  531 

but  this  was  not  an  open  rate  of  which  small  shippers  could  take 
advantage.  Large  quantities  of  grain  were  daily  transferred  from 
the  railroad  cars  of  one  line  to  those  of  another,  near  the  outskirts 
of  the  city,  at  a  cost  of  less  than  50  cents  per  car.  This  was  done 
by  hand  shoveling,  and  the  cost  was  contrasted  with  the  charge 
made  by  warehousemen  of  $1  per  car  for  "trimming,"  which  simply 
meant  the  leveling  of  the  grain  in  the  car  as  it  was  poured  in  from 
the  elevator.  The  Chase  Elevator  Company  published  a  statement 
giving  as  the  reason  why  Chicago  elevators  were  losing  trade,  the 
establishment  of  many  country  elevators  where  grain  was  stored 
and  handled  more  cheaply;  and  that  the  building  of  these  elevators 
was  encouraged  by  the  railroads,  and  that  many  of  them  were 
owned  by  Chicago  dealers.  In  May  the  vessel  owners  determined 
to  form  an  association  for  the  purpose  of  taking  measures  against 
the  high  terminal  charges,  which  were  said  to  be  over  three  cents  per 
hundred  pounds  in  Chicago,  while  at  other  points  they  were  less 
than  one  cent.  The  switching,  trimming  and  elevating  charges  were 
the  ones  of  which  the  vessel  owners  particularly  complained.  In 
line  with  the  rule  forbidding  transactions  in  puts  and  calls  in  the 
exchange  room  was  the  decision  made  by  the  Directors,  in  May, 
that  the  ofifer  to  buy  or  sell  "seller  double"  or  "buyer  double"  on 
'Change  was  an  infringement  of  the  rule  under  which  privileges 
were  prohibited.  The  Directors  also  gave  notice  in  June,  that  they 
requested  the  President  to  promptly  impose  a  fine  of  $5  in  all  cases 
where  it  was  known  that  members  traded  out  of  hours.  They  also 
declared  that  they  understood  the  rules  to  mean  that  not  more 
than  5,000  bushels  of  grain,  or  250  barrels  of  pork  could  be  included 
in  one  bill  of  property  for  delivery. 

The  National  Board  of  Trade  met  in  New  York  in  June,  1876; 
a  resolution,  ofifered  by  Chicago,  opposing  the  threatened  with- 
drawal of  the  fast  mail  service  was  adopted.  Among  other  resolu- 
tions were  the  following,  recommending  a  uniform  system  of  legis- 
lation regulating  the  issue,  negotiability  and  transfer  of  bills  of 
lading,  warehouse  receipts  and  like  commercial  instruments ;  urging 
the  adoption  of  uniform  standards  of  quantity  in  the  principal  mar- 
kets of  the  country;  for  a  revision  of  the  revenue  laws;  for  the 
appointment  of  an  international  committee  for  better  trade  relations 
with  South  America ;  for  the  passage  of  uniform  bankruptcy  laws, 
and  for  the  appointment  of  a  tariff  commission. 

Court  decisions  bearing  on  the  moot  questions  of  Board  of 
Trade  transactions  and  discipline  were  made  in  July.  In  the  case 
of  Pickering  et  al.  vs.  Henry  Cease,  the  Supreme  Court  held:  "The 
parties  were  merely  speculating  in  differences  as  to  the  market 
values  of  grain  on  the  Chicago  market.  Such  contracts  are  void  at 
common  law  as  being  inhibited  by  sound  public  policy.  Time  con- 
tracts are  of  daily  occurrence,  and  must  of  necessity  be  in  commer- 
cial transactions.     Agreements  for  the  future  delivery  of  grain  or 


532  HISTORY  OF  THE  BOARD  OF  TRADE  [1876] 

any  other  commodity  are  not  prohibited  by  the  common  law,  nor  by 
any  statute  of  the  state,  nor  by  any  policy  adopted  for  the  protection 
of  the  public.  What  the  law  does  prohibit,  and  what  it  deems  detri- 
mental to  the  general  welfare  is  speculating  in  differences  in  market 
values."  The  Supreme  Court  also  sustained  the  Board  in  the  expul- 
sion of  T.  B.  Rice  and  fully  sustained  the  right  of  the  Board  to  dis- 
cipline its  members. 

Of  great  importance  to  the  trade  was  the  continued  report  that 
grain  was  out  of  condition  in  the  Chicago  elevators.  President 
Bensley  appointed  J.  W.  Preston,  H.  W.  Rogers,  S.  D.  Foss,  J.  J. 
McDermid  and  J.  D.  Cole  as  a  committee  to  report  on  the  condition 
of  wheat.  After  an  examination  they  reported  that  while  a  few 
bins  of  wheat  were  slightly  heated,  the  general  condition  was  good 
and  there  was  no  justification  for  posting.  Nevertheless,  this  report 
caused  a  decline  of  several  cents  per  bushel  in  wheat  prices.  So 
great  was  the  dissatisfaction  with  the  service  that,  in  August,  Wil- 
liam T.  Baker  &  Company  notified  the  state  grain  inspector  that 
his  services  would  be  dispensed  with  by  them,  saying  that  there  was 
too  much  politics  in  the  inspection.  Lyon,  Lester  &  Company  was 
another  firm  which  refused  state  inspection.  The  dissatisfaction 
with  the  Committee  on  Appeals  of  grain  inspection  came  to  a  head 
when  the  committee  was  requested  to  resign,  and  P.  W.  Dater, 
D.  W.  Irwin  and  S.  D.  Foss  were  appointed.  This  change,  how- 
ever, was  not  satisfactory  to  the  Board,  and  was  received  with  great 
disfavor,  many  receivers  refusing  to  take  their  cases  before  them. 
In  September  the  Warehouse  Committee  of  the  Directors  of  the 
Board  of  Trade  examined  the  wheat  in  Neeley  &  Hambleton's 
elevator,  and  reported  that  none  was  in  good  condition.  As  the 
proprietors  had  failed  to  notify  the  public,  according  to  law,  the 
Directors  gave  notice  that  No.  2  wheat  receipts  from  that  house, 
issued  prior  to  September  14,  would  not  be  recognized  as  "regular." 
There  was  much  fear  that  all  the  old  wheat  in  storage  was  in  bad 
shape,  and  a  petition  to  the  Board  of  Directors  was  circulated  on 
'Change  asking  that  no  receipts  for  grain  be  recognized  as  "regu- 
lar" for  delivery  on  contracts  unless,  first,  that  they  be  issued  by 
parties  of  well  reputed  integrity  and  of  thoroughly  established  finan- 
cial credit ;  second,  that  the  elevators  can  be  easily  approached  by 
vessels  of  ordinary  draft,  and  can  load  cars  during  rainy  weather ; 
third,  that  all  grain  cleaned  in  this  city  be  placed  in  special  bins 
and  not  recognized  as  regular.  On  September  20  the  Directors 
notified  the  manager  of  the  St.  Louis  elevator  that  some  of  the 
wheat  in  that  house  was  out  of  condition.  The  chief  inspector 
declared  the  wheat  to  be  all  right,  and  the  St.  Louis  elevator  refused 
to  post  it,  whereupon  the  Directors  declared  old  No.  2  wheat  in 
that  warehouse  to  be  irregular.  The  case  was  to  have  come  before 
the  Committee  on  Appeals,  but  it  was  announced  that  no  action 
could  be  taken,  as  no  one  would  bring  the  case  properly  before  the 


[1876]  OF  THE  CITY  OF  CHICAGO  533 

committee.  On  September  26  the  receipts  of  this  elevator  were 
declared  irregular,  and  it  was  not  until  November  1  that  they  were 
again  made  regular.  As  September  wheat  was  at  this  time  the  sub- 
ject of  much  speculation,  all  these  actions  concerning  wheat  out  of 
condition  had  effect  upon  the  market  and  were  approved  or  dis- 
approved by  members  according  as  their  interests  lay.  According 
to  the  "Tribune"  the  September  wheat  deal,  which  was  generally 
understood  to  have  been  a  corner,  closed  with  little  excitement, 
and  not  much  chance  for  trouble.  It  was  believed  that  less  than 
100,000  bushels  remained  unsettled  at  the  end  of  the  month.  The 
magnitude  of  the  deal  was  estimated  at  between  3,000,000  and 
5,000,000  bushels,  and  the  profit  in  the  neighborhood  of  $250,000. 
The  wheat  was  bought  all  the  way  up  from  85  cents  and  was  under- 
stood to  have  been  held  chiefly  on  account  of  parties  in  Milwaukee. 
Later  it  was  announced  that  260,000  bushels  had  been  settled  at 
$1.10>^. 

October  was  notable  for  several  things.  The  Chicago  packers 
refused  to  take  part  in  the  National  Convention,  claiming  that  other 
cities  failed  to  report  stock  and  that  they  were  furnishing  statistics 
for  the  benefit  of  other  dealers.  On  October  8  the  Board  of  Trade 
refused  to  adjourn  on  the  anniversary  of  the  Chicago  fire  on  the 
ground  that  enough  stress  had  already  been  placed  upon  that  event. 
Later  in  the  month  European  war  news  caused  much  market  excite- 
ment, gold  went  up  3  cents,  wheat  5}i  cents,  corn  IJ/^  cents,  pork 
45  cents  and  lard  20  cents.  Wheat  touched  $1.17  for  November, 
and  the  sudden  upturn  caused  the  failure  of  the  well  known  firm  of 
Ranney  &  Inglis.  At  this  time  again  there  was  much  fault  found 
with  the  state  inspection  of  grain,  and  the  "Tribune"  published 
several  columns  of  interviews  with  members  of  the  Board  of  Trade, 
declaring  the  inspectors  incompetent.  On  November  14  appeared 
in  the  Chicago  papers  the  first  of  the  get-rich-quick  advertisements 
which  were  to  be  so  common  at  a  later  period,  and  which  heralded 
the  appearance  of  the  first  real  bucket  shop  on  the  Chicago  market. 
The  advertisement  read : 

"RUMBLE  &  COMPANY. 

"My  $1,000  was  made  from  $20  and  $100  invested  in  grain  by 
Rumble  &  Company,  grain  and  privilege  brokers,  132  LaSalle  Street, 
Chicago.     Weekly  reports  free.     Circular  tells  of  puts  and  calls." 

The  insertion  of  this  advertisement  led  to  some  investigation, 
and  it  was  publicly  announced  that  Rumble  &  Company  were  not 
known  upon  the  Chicago  Board  of  Trade. 

Market  conditions  during  the  fall  of  1876  were  complicated  by 
the  uncertainty  of  the  result  of  the  presidential  election.  This  was 
the  Hayes-Tilden  contest,  in  which  the  votes  of  several  southern 
states  were  in  question,  the  result  not  being  definitely  decided  until 
March  3,  1877,  the  day  before  President  Hayes  was  inaugurated. 


534  HISTORY  OF  THE  BOARD  OF  TRADE  [1876] 

In  December  the  general  dissatisfaction  with  state  inspection 
had  reached  such  a  stage  that  it  was  felt  that  concerted  action 
should  be  taken  to  present  the  matter  to  the  legislature.  Accord- 
ingly, a  meeting  of  grain  receivers  was  held  in  the  rooms  of  the 
Arbitration  Committee,  H.  A.  Towner,  presiding.  The  meeting 
listened  to  the  report  of  a  committee  consisting  of  C.  E.  Culver, 
F.  D.  Oertel,  J.  G.  Smythe,  Julian  Kune  and  M.  W.  Foss.  The 
report  dealt  with  the  origin  of  Board  of  Trade  inspection,  and  the 
difficulties  met  with,  and  said  application  was  made  to  the  legisla- 
ture to  legalize  it;  instead  of  which  inspection  was  taken  from  the 
Board  and  the  power  to  grade  grain,  which  largely  afifected  the  price, 
was  given  into  the  hands  of  men  not  familiar  with  the  trade,  and  who 
were  antagonistic  to  the  dealers  in  grain.  At  first  grades  were 
fixed  by  law,  and  could  only  be  changed  by  the  legislature.  Later 
this  was  modified  so  that  changes  could  be  made  on  twenty  days' 
notice,  and  the  Appeals  Committee  authorized.  The  committee 
stated  that  the  law  was  better  after  these  amendments,  but  that 
there  was  much  dissatisfaction  with  the  law  and  with  its  adminis- 
tration. They  asked  why  Chicago  should  be  singled  out  and  other 
cities  of  the  state  omitted,  and  cited  that  New  York  prohibited  state 
inspection.  They  admitted  that  inspection  was  necessary  where  the 
grain  of  different  owners  is  handled  in  bulk,  but  insisted  on  the 
natural  right  of  buyers  and  sellers — of  the  owners  of  property — to 
arrange  as  to  its  classification.  They  urged  also  that  the  rights  of 
other  states  were  infringed  upon.  The  committee  believed  that 
the  Board  was  unauthorized  and  that  it  would  be  unwise  for  it  to 
engage  in  the  inspection  business  by  employing  inspectors,  col- 
lecting fees  and  assuming  the  risk  incident  to  the  prosecution  of  the 
business.  They  held,  however,  that  the  Board  was  authorized  to 
make  rules  for  the  inspection  of  property,  to  adopt  standards  of 
grade,  to  appoint  inspectors,  weighmen,  etc.,  and  that  the  associa- 
tion did  exercise  such  power  in  regard  to  property  other  than  grain, 
namely,  provisions,  pork,  flour,  cooperage,  hay,  etc.,  all  of  which 
were  inspected  under  the  rules  of  the  association  by  inspectors 
appointed  by  it  and  strictly  liable  for  errors.  It  was  their  firm^ 
belief  that  the  interest  of  shippers  from  Chicago  and  the  good  of 
the  grain  trade  could  best  be  promoted  by  the  state  surrendering 
the  business  of  inspection  of  grain  and  allowing  the  Board  to  exer- 
cise the  charter  rights  which  it  had  assumed  in  regard  to  other 
property  dealt  in  on  'Change.  It  was  recommended  that  the  grain 
shippers  be  invited  to  co-operate  with  the  grain  receivers  in  an 
effort  to  secure  the  repeal  of  that  part  of  the  warehouse  law  that 
made  it  obligatory  upon  the  state  to  inspect  grain  in  Chicago.^ 
Acting  upon  the  suggestion  of  the  committee  five  from  among  the 
shippers,  millers  and  grain  dealers  were  added  to  its  membership. 
This  agitation  continued  through  the  remainder  of  the  year,  in 
the  press  and  on  'Change.    The  evils  of  what  was  called  "political 


[1876]  OF  THE  CITY  OF  CHICAGO  535 

grain  inspection"  were  pointed  out,  and  it  was  charged  that  the 
personnel  of  the  inspection  court  was  much  lower  than  formerly, 
was  much  lower  in  point  of  ability  to  judge  grain,  and  that  the 
inspections  were  very  uneven.  All  this  was  emphasized  in  the 
report  of  the  Directors,  and  the  vigorous  campaign  made  by  the 
Board  the  following  year. 

A  matter  of  litigation  of  great  interest  to  the  Board  was  insti- 
tuted by  W.  T.  Baker  &  Company  in  September,  1876,  at  which 
time  they  asked  an  injunction  against  the  Board,  to  prevent  their 
expulsion,  growing  out  of  a  transaction  in  December,  1875.  At  that 
time  Baker  &  Company  sold  5,000  bushels  of  corn  at  46^  cents  to 
Foss,  Elliott  &  Company,  and  upon  failure  to  deliver  settlement 
was  asked  at  the  corner  price.  Baker  &  Company  refused  to  arbi- 
trate, asserting  that  the  Arbitration  Committee  was  directly  inter- 
ested adversely  to  them.  Thereupon  a  special  committee  consisting 
of  A.  M.  Wright,  George  M.  How,  N.  K.  Fairbank,  S.  A.  Kent  and 
Edson  Keith  was  appointed,  which  awarded  Foss,  Elliott  &  Com- 
pany a  small  sum.  The  question  was  carried  to  the  Appeals  Com- 
mittee and  the  award  was  increased  and  based  upon  the  corner  price. 
Baker  &  Company  claimed  that  the  Appeals  Committee  had  no 
power  over  the  award  of  a  special  committee,  and  took  the  case  to 
the  courts.  The  Directors  thereupon  passed  the  following  resolu- 
tion :  "A  resort  to  the  courts  to  recover  money  paid  under  an 
award  of  the  committee  of  the  Board  is  a  violation  of  the  agree- 
ment of  submission  signed  by  the  parties."  The  injunction  came 
up  for  hearing,  and  President  Bensley  and  Secretary  Randolph 
testified  that  the  expulsion  of  Baker  &  Company  was  not  contem- 
plated, but  they  refused  to  pledge  the  Board  that  no  such  action 
would  be  taken.  Whereupon  an  injunction  for  sixty  days  was 
granted,  although  it  was  apparent  that  this  was  in  direct  conflict 
with  the  decision  of  the  Supreme  Court  in  the  Rice  case. 

The  Markets 

Unusual  market  conditions  prevailed  at  dififerent  times  during 
1876.  In  February  com  was  in  the  neighborhood  of  40  cents  per 
bushel  for  feeding  and  hogs  were  about  $8  per  hundred  live  weight. 
It  was  stated  that  this  was  a  condition  never  before  known  in  the 
Chicago  market,  and  it  was  taken  to  mean  a  larger  hog  crop.  There 
was  a  corner  in  February  wheat,  and  on  March  1  that  cereal  declined 
6j4  cents.  The  most  exciting  corner  of  the  year  was  that  in  May 
barley.  The  price  was  forced  up  to  80  cents,  while  June  was  quoted 
at  about  55  cents.  The  rules  against  corners  were  brought  into 
play  and  the  shorts  decided  not  to  settle,  but  to  arbitrate.  The 
Arbitration  Committee  in  June  fixed  the  settlement  price  at  80 
cents,  and  their  decision  was  taken  to  the  Appeals  Committee. 
Later  this  decision  seems  to  have  been  changed  by  the  Arbitration 
Committee  itself,  and  the  price  fixed  at  71  >4  cents,  with  5  per  cent 


536  HISTORY  OF  THE  BOARD  OF  TRADE  [1876] 

damages,  which  made  the  price  of  settlement  75  cents.  This  action 
was  approved  by  the  Appeals  Committee  in  July,  and  the  deal  set- 
tled on  that  basis.  In  May  and  June  the  market  was  affected  by 
the  possibility  of  war  between  Russia  and  Turkey,  but  this  inflation 
of  prices  was  temporary,  for  on  July  18  the  financial  editor  of  the 
"Tribune"  said :  "Since  the  last  National  holiday,  two  weeks  ago, 
the  price  of  wheat  has  declined  14^  cents  per  bushel,  or  nearly  14 
per  cent.  The  later  war  news  revived  prices  and  the  devastation 
caused  by  grasshoppers  in  the  Western  states  also  had  a  tendency 
to  increase  the  price.  Trading  during  the  last  months  of  the  year 
was  not  sensational,  and  it  was  considered  worthy  of  note  that  the 
year  ended  without  a  "squeeze." 

In  April  the  Chicago  Pork  Packers'  Association  held  its  annual 
meeting  and  re-elected  B.  F.  Murphey  President;  B.  P.  Hutchin- 
son, Vice-President;  C.  L.  Raymond,  Treasurer;  B.  F.  Howard, 
Secretary,  and  Josiah  Stiles,  Henry  Botsford,  C.  M.  Culbertson, 
J.  B.  Robertson  and  J.  L.  Hancock,  Directors.  P.  D.  Armour  headed 
the  Arbitration  Committee.  In  February,  1876,  was  mentioned 
the  first  dissatisfaction  with  the  quarters  occupied  by  the  Board, 
and  agitation  for  a  new  building. 

Chicago  transacted  a  greater  volume  of  business  in  1876  on  the 
whole  than  in  any  preceding  year,  in  spite  of  the  general  depression 
which  reigned  in  the  West  and  in  the  East,  with  the  exception  of  a 
temporary  spur  to  activity  given  by  the  Centennial  Exposition  at 
Philadelphia.  Outside  of  that,  the  one  hundredth  year  of  National 
Existence  was,  commercially  speaking,  a  dull  one,  though  not  with- 
out signs  of  improvement,  and  Chicago  held  her  own  in  view  of  all 
the  circumstances.  It  was  only  right  that  the  West  should  pay 
homeage  to  the  East  in  1876,  and  she  did  so  royally,  but  felt  that 
she  could  not  afford  an  immediate  repetition  of  the  tribute  to  the 
memories  of  a  century  ago. 

^  Produce 

The  produce  trade  of  1876  compared  favorably  with  that  of 
former  years.  It  was  largely  in  excess  of  that  of  1875,  as  measured 
by  volume,  and  exceeded  it  in  value  by  nearly  one  per  cent,  though 
prices  ruled  lower  on  the  average  than  in  any  former  year  since 
the  war.  The  chief  gain  was  in  corn,  hogs  and  hog  products;  the 
principal  falling  off  was  in  wheat,  the  latter,  however,  being  par- 
tially made  up  by  an  augmented  flour  movement.  The  course  of 
trading  was  very  steady,  on  the  whole,  notwithstanding  consider- 
able excitement  over  the  question  of  war  in  the  old  world.  Few 
failures  occurred  in  the  trade,  and  corner  operations  were  confined 
to  narrow  limits. 

The  volume  of  speculative  trading  in  produce  continued  to 
increase,  but  its  character  underwent  an  important  change.  Before 
the  passage  of  the  Board  of  Trade  rules,  intended  to  prevent  cor- 


[1876]  OF  THE  CITY  OF  CHICAGO  537 

ners,  prices  fluctuated  up  and  down  widely.  After  the  adoption 
of  these  rules  there  was  comparative  steadiness — changes  still,  but 
within  narrower  limits.  It  was  objected  to  those  rules  that  they 
threw  the  markets  entirely  into  the  hands  of  the  "bears,"  and  would 
diminish  the  volume  of  trade  by  lowering  the  average  of  prices  paid 
here  for  produce.  There  was  no  doubt  that  these  rules  prevented 
quotations  from  going  so  high  as  before,  and  therefore  Chicago  did 
not  offer  the  temporary  inducements  to  ship  avalanches  of  produce 
to  the  city  which  used  every  now  and  then  to  exist.  But  the  col- 
lapses that  followed  those  fever  heats  of  excitement  also  ceased, 
and  the  steadier  course  of  quotations  induced  larger  speculative 
orders  from  people  who  formerly  invested  but  sparingly  for  fear 
of  being  ruined. 

The  rates  of  lake  freights  were  so  low  during  1875  that  it  was 
generally  thought  they  could  not  possibly  go  lower.  But  they  were 
still  further  reduced  in  1876,  and  were  kept  at  a  much  more  uniform 
rate  than  usual.  The  highest  rate  on  corn  to  Buffalo,  October  17, 
was  AYz  cents,  the  lowest  July  13  was  Ij^  cents.  The  average  was 
2  7/10  cents.  Rail  rates  ruled  very  low.  During  the  greater  part 
of  the  year  the  nominal  rate  was  only  20  cents  per  100  pounds  from 
Chicago  to  New  York  on  grain,  and  even  that  low  figure  was  exten- 
sively cut.  In  the  beginning  of  December  the  rate  was  raised  to 
30  cents  on  grain  and  the  year  closed  with  a  promise  of  further 
increase  January  1  to  35  cents  per  100  pounds  on  grain  and  40  cents 
on  meats  to  New  York,  with  rates  to  other  seaboard  points  in 
proportion. 

For  the  handling  of  grain  in  Chicago  there  were  nineteen  ele- 
vators, including  the  "Pacific,"  recently  rebuilt,  with  capacity  of 
100,000  bushels,  and  Joseph  Armour's,  the  capacity  of  which  was 
doubled,  making  it  450,000  bushels.  The  total  capacity  was  about 
15,750,000  bushels. 

The  conduct  of  the  warehousing  business  during  1876  was 
unexceptionable,  except  that  the  charges  were  higher  than  many 
deemed  to  be  necessary.  They  were,  however,  no  higher  than  in 
1875,  and  the  warehousemen  voluntarily  reduced  the  storage  on 
rejected  grain  to  the  same  figures  as  for  No.  2.  They  were  also  to 
be  credited  with  great  care  and  expense,  with  no  little  loss  in  weight 
in  the  continuous  handling  of  grain  during  the  germinating  season, 
by  which  means  it  was  kept  in  fair  condition  all  through  the  year. 
The  conduct  of  grain  inspection  was  not  all  that  could  be  desired. 
On  the  contrary,  very  much  dissatisfaction  was  expressed,  chiefly 
in  regard  to  barley,  corn  and  wheat. 

Provisions 

In  the  states  of  the  Mississippi  Valley  during  the  season  of 
1876-77  a  total  of  5,068,992  hogs  were  packed,  and  of  these  Chicago's 
share  was  1,618,084,  a  substantial  gain,  but  still  not  equal  to  the 


y 


538  HISTORY  OF  THE  BOARD  OF  TRADE  [1876] 

season  of  1874-75.  At  the  same  time  the  packing  business  of  Cin- 
cinnati decreased  40,000  and  Cleveland  increased  33,000,  that  city 
for  the  first  time  going  above  the  100,000  mark.  St.  Louis  made  a 
good  showing,  with  a  gain  of  85,000,  and  Kansas  Ctiy  regained 
much  of  its  prestige  at  the  expense  of  St.  Joseph.  Indianapolis, 
though  still  ranking  fourth,  lost  heavily,  and  the  new  metropolis 
of  Omaha  gained  nearly  100  per  cent.  By  this  time  Chicago,  with 
its  record  of  more  than  1,500,000  for  four  years  in  succession,  being 
almost  equal  to  the  combined  pack  of  Cincinnati,  St.  Louis,  Indian- 
apolis, Milwaukee  and  Louisville,  had  established  a  supremacy  as  a 
hog  packing  center  that  has  never  been  assailed,  and  further  com- 
parative statements  are  unnecessary,  for,  within  a  few  years,  or 
until  Omaha  and  Kansas  City  became  important,  the  history  of  the 
packing  industry  of  Chicago  was,  practically,  that  of  the  industry 
for  the  Mississippi  Valley.  In  live  stock  cattle  receipts  for  the  first 
time  exceeded  one  million  head,  the  figures  being  1,096,745,  with 
shipments  of  797,724.  The  receipts  of  live  hogs  were  4,190,006  and 
the  shipments  1,131,635.  The  number  of  hogs  packed  in  Chicago 
from  March  1,  1875,  to  March  1,  1876,  was  2,320,846,  and  as  Chicago 
was  the  only  city  where  the  summer  pack  was  of  large  proportions, 
it  easily  led  the  world  in  this  great  industry.  The  number  of 
dressed  hogs  received  showed  a  decrease  to  148,622. 

The  market  for  provisions  was  active  during  the  greater  part 
of  the  year  and  irregular,  though  the  fluctuations  were  less  frequent 
than  in  most  former  years.  The  course  of  prices  was  generally 
upward  during  the  first  three  months,  tended  downwards  for  the 
next  six  months,  and  then  reacted  to  a  moderate  extent.  The  trade 
was  not  so  well  controlled  by  capital  as  in  1875,  the  largest  investors 
being  those  who  had  lost  most  money  on  both  the  upward  and 
downward  turns.  Chicago  controlled  the  trade  of  the  entire  West 
in  provisions.  She  not  only  packed  about  as  many  hogs  as  Cincin- 
nati, Louisville,  St.  Louis,  Indianapolis  and  Milwaukee  combined, 
but  became  the  model  for  operations  outside,  and  the  center  for 
trading  on  the  part  of  both  buyers  and  sellers  all  over  the  world. 

Wheat 

The  movement  of  wheat  through  Chicago  was  again  less  than 
during  the  preceding  twelve  months,  showing  a  very  large  falling 
off  from  1874,  when  the  receipts  were  the  largest  in  several  past 
years.  A  great  deal  of  wheat  went  around  Chicago,  and  large 
quantities  were  shipped  directly  through  the  city.  The  inspection 
into  store  would  have  been  even  less  than  it  was  but  for  the  fact 
that  in  the  autumn  months  a  great  many  lots  intended  to  be  simply 
transferred  were  placed  in  store  because  cars  could  not  be  pro- 
cured for  transportation  further  East.  Prices,  too,  ranged  lower, 
averaging  nearly  the  same  as  in  1875,  and  the  course  of  the  market 
was  steadier. 


[1876]  OF  THE  CITY  OF  CHICAGO  539 

The  receipts  of  wheat  as  reported  by  the  Secretary  of  the  Board 
of  Trade  were  16,574,058  bushels,  against  24,206,370  bushels  in  1875. 
The  shipments  were  14,361,950  bushels,  against  23,184,349  bushels 
in  1875. 

The  market  dragged  badly  all  through  the  spring,  being 
■depressed  by  the  accumulations  of  wheat  on  the  seaboard,  which 
would  not  move  across  the  ocean,  and  were  taken  slowly  for  home 
consumption.  The  difficulty  in  Chicago  was  increased  by  the 
Schroeder  &  Lindblom  failure  in  Milwaukee,  under  a  load  of  nearly 
2,000,000  bushels,  which  they  had  vainly  tried  to  carry  through  to 
the  opening  of  navigation.  The  market  had  barely  recovered  from 
this  stroke,  and  attracted  a  moderate  order  demand,  when  it  was 
again  depressed  by  rumors  of  bad  condition,  and  went  down  to 
83  cents.  The  average  of  August  was  even  below  that  of  July, 
due  to  a  growing  distrust  of  the  quality  of  the  old  wheat.  During 
the  season  of  depression  a  powerful  combination  quietly  obtained 
control  of  the  market,  and  the  unfortunate  shorts  slowly  woke  up 
to  a  consciousness  of  the  fact  that  they  were  cooped  up  in  one  of 
the  most  gigantic  corners  ever  known,  though  the  new  rules  were 
sufficient  to  prevent  such  an  extensive  squeeze  in  prices  as  had 
been  experienced  previously.  The  Turkish  question  loomed  up 
at  this  juncture,  which,  added  to  reports  of  a  short  crop  in  the 
United  States,  enabled  the  clique  to  realize  a  handsome  profit 
without  forcing  the  settling  price  more  than  a  few  cents  above  the 
shipping  value  to  other  points.  Under  this  "September  deal"  the 
distinction  in  price  between  the  old  and  the  new  No.  2  was  entirely 
obliterated,  though  the  difference  in  actual  value  was  generally 
estimated  at  10@12  cents  per  bushel,  and  the  same  as  between 
new  and  old  No.  3. 

During  October  the  market  continued  to  be  excited  by  war 
rumors,  and  the  speculative  furore  was  strong  enough  to  keep  the 
old  and  new  No.  2  at  the  same  price  till  the  wor/d  "new"  was 
dropped  from  the  inspectors'  lists  on  the  1st  of  November.  The 
market  then  eased  oflf  slightly,  but  again  advanced  and  ruled  strong 
in  December,  the  highest  point  of  the  year  being  reached  in  that 
month.  The  cause  of  the  advance  was  not  so  much  the  anticipation 
of  war  in  the  old  world  as  a  growing  conviction  that  the  supply 
was  short  in  Europe,  as  well  as  in  the  United  States,  and  a  belief 
that  American  wheat  would  be  wanted  for  consumption  at  much 
higher  prices  the  following  spring  and  summer. 

Com 

The  course  of  the  corn  market  was  a  surprise  to  most  people 
in  the  trade.  The  movement  through  the  city  was  unusually  large. 
The  receipts  of  the  year  were  48,668,640  bushels  and  the  shipments 
45,629,035  bushels.  A  great  deal  of  the  corn  was  damp  when  gath- 
ered, owing  to  the  long-continued  bad  weather  near  the  time  of 


540  HISTORY  OF  THE  BOARD  OF  TRADE  [1876} 

maturity.  The  result  was  that  the  corn  could  not  be  depended 
upon  to  keep.  Not  a  little  of  it  rotted  in  the  cribs,  and  there  were 
a  good  many  bad  kernels  even  in  corn  of  otherwise  good  quality. 
It  was  thus  liable  to  heat  all  through  the  year,  especially  in  the  hot 
weather  of  the  summer,  unlike  sound  fat  corn,  which  is  in  danger  of 
heating  only  during  the  germinating  season.  Great  care  was  neces- 
sary in  handling  it. 

The  range  of  the  market  was  unusually  small,  the  variation 
in  prices  for  several  months  being  only  a  few  cents.  The  course 
of  the  market,  in  1876,  at  least  during  the  first  ten  months,  was 
governed  more  by  calculation,  less  affected  by  what  is  usually 
called  speculation,  and  ruled  by  fewer  men,  than  in  any  former 
year  since  the  war.  It  was  widely  spoken  of  as  a  manipulated  deal 
"all  the  way  through,  but  the  movement  of  the  old  crop  seems  to 
have  been  a  perfectly  legitimate  one.  Early  in  the  winter  of  1875-6 
prominent  parties  took  a  comprehensive  survey  of  the  field.  They 
saw  that  the  consumption  of  corn  was  capable  of  being  indefinitely 
increased  in  Europe,  if  supplied  on  attractive  terms.  They  saw  that 
the  farmers  of  England,  Ireland  and  France  had  recently  wakened 
to  a  sense  of  the  feeding  value  of  corn,  and  had  become  convinced 
that  with  low-priced  corn  they  could  fatten  stock  much  more 
cheaply  than  the  meat  could  be  procured  from  the  United  States. 
These  parties,  therefore,  concluded  that  the  marketable  surplus  of 
the  West  was  no  greater  than  could  be  successfully  handled  at  mod- 
erate prices,  even  if  there  were  no  material  increase  in  the  New 
England  demand,  and  deemed  it  probable  that  freights  would  rule 
very  low  in  1876,  as  they  had  done  the  preceding  year,  especially 
if  the  moving  part  of  the  corn  crop  should  pass  through  few  hands,^ 
so  that  there  would  be  little  competition  among  shippers,  in  which 
event  carriers  would  have  little  voice  in  the  establishment  of  freight 
rates.  The  increase  in  the  demand  for  corn  in  the  British  Isles 
during  previous  years  and  the  observed  ratio  of  price  to  consump- 
tion satisfied  them  that  if  corn  could  be  laid  down  in  Great  Britain 
at  26s  per  quarter,  steadily  and  continuously,  there  would  be  a 
demand  for  all  that  could  be  forwarded  thither.  On  this  estimate 
they  decided  to  buy  all  corn  offered,  as  long  as  they  could  make 
a  profit  on  it  at  26s  c.  f.  &  i.  to  Liverpool,  and  made  some  large  con- 
tracts to  lay  it  down  there  at  that  figure.  These  offers  were  readily 
taken  at  first,  buyers  on  the  other  side  of  the  Atlantic  believing  that 
they  could  work  off  untold  quantities  at  something  above  that  price. 
The  outlook  was  certainly  a  favorable  one  for  them,  and  in  England, 
Ireland  and  France  extraordinarily  large  quantities  were  absorbed, 
taking  the  place  of  other  and  more  expensive  food.  But  the  task 
was  greater  than  had  been  bargained  for.  A  steady  demand  in 
Chicago,  which  was  necessary  to  carry  out  the  plan,  brought  out 
much  larger  quantities  than  had  been  reckoned  on,  and  the  offer- 
ings on  the  other  side  of  the  Atlantic  were  so  much  in  excess  o£ 


[1876]  OF  THE  CITY  OF  CHICAGO  541 

the  wants  of  consumers  that  the  price  fell  to  25s  on  lots  in  good 
condition,  and  some  parcels  which  had  become  more  or  less  heated 
in  the  passage  were  sacrificed  at  19@22s  per  480  pounds. 

After  the  close  of  navigation  the  movement  was  slow.  The 
new  corn  came  forward  so  tardily  as  to  induce  fears  of  a  corner  on 
the  light  stocks  of  old  in  December,  and  the  price  for  that  month 
rose  to  a  premium,  which  kept  the  old  corn  in  storage  in  Chicago. 
Country  shippers,  and  some  of  the  receivers  in  this  city,  complained 
that  the  inspection  was  so  high  here  that  they  could  not  afford  to 
send  their  corn  to  Chicago.  A  large  percentage  of  it  was  passed 
into  store  as  new  mixed  or  rejected,  much  of  which,  the  owners 
claimed,  ought  to  have  been  graded  as  No.  2. 

Oats  y 

The  market  for  oats  exhibited  a  marked  falling  off.  There 
was  not  much  change  in  the  volume  passing  through  the  city,  but 
a  great  decrease  in  aggregate  value.  The  receipts  of  the  year  were 
13,030,121  bushels,  against  12,916,428  bushels  in  1875,  and  the  ship- 
ments 11,271,642  bushels,  against  10,279,134  bushels  the  preceding 
year.  But  the  value  of  the  receipts  was  not  much  more  than  half 
as  great,  owing  to  the  fact  of  relatively  low  prices  during  1876,  in 
addition  to  poor  quality  of  the  new  crop. 

The  course  of  the  market  was  very  regular,  there  being  few 
features  to  require  description.  There  was  no  corner,  since  the  one 
in  the  summer  of  1875  resulted  disastrously  to  the  person  who 
engineered  it.  The  new  rules  of  the  Board  of  Trade,  too,  were  espe- 
cially unfavorable  to  corners  in  oats,  as  the  5  per  cent  penalty  it 
imposed  on  parties  failing  to  make  provision  for  their  contracts 
amounted  to  comparatively  little  on  a  5,000  bushel  lot.  Hence 
prices  ruled  low  in  the  absence  of  excitement  and  under  a  good 
supply,  the  crop  of  1875  being  a  large  one.  The  surplus  of  that 
crop  was  considerably  larger  than  was  supposed  by  many  parties 
in  the  trade,  and  they  lost  money  by  operating  on  the  long  side  of 
the  deal. 

Rye    ,. 

The  demand  for  rye  was  light  through  the  greater  part  of  the 
year,  while  the  volume  offered  for  sale  was  unusually  large,  making 
the  market  an  unsatisfactory  one  to  the  trader.  The  volume  of 
receipts  was  fully  doubled,  being  1,447,900  in  1876,  against  699,583 
bushels  in  1875.  The  volume  of  shipments  increased  even  more, 
the  1,433,976  bushels  shipped  in  1876  being  four  times  the  310,592 
bushels  shipped  in  1875.  The  cause  for  this  great  disproportion 
laid  in  the  fact  that  comparatively  little  rye  was  used  in  Chicago, 
nearly  all  the  distilleries  being  closed  during  the  greater  part  of  the 
year. 

For  the  same  reason  the  market  dragged  badly.     It  was  very 


542  HISTORY  OF  THE  BOARD  OF  TRADE  [1876] 

dull  during  the  first  three  or  four  months,  as  the  distillers  were 
inactive,  and  the  flour  men  held  off  for  lower  prices;  so  that  there 
was  scarcely  any  demand,  as  speculators  could  see  no  inducement 
to  handle  it,  and  prices  were  lower  in  the  spring  than  in  the  winter 
months  for  this  reason.  In  June  a  fair  demand  sprang  up  for  export 
to  Europe,  under  which  the  market  for  No.  2  advanced  to  72J/2 
cents.  In  the  middle  of  that  month  the  trade  commenced  to  buy 
for  August  delivery,  starting  in  at  62c,  and  the  purchase  probably 
exceeded  250,000  bushels.  In  July  and  August  the  market  receded 
to  50  cents,  owing  to  the  depression  in  wheat,  and  the  fact  of  large 
receipts  of  the  new  crop,  which  weighed  down  the  market.  A  par- 
tial rally  was  affected,  but  large  receipts  again  broke  the  market  to 
56  cents,  and  it  then  ruled  steadier  until  late  in  November.  At  that 
time  the  rye  crop  of  Germany  was  discovered  to  be  so  short  as  to 
require  large  supplies  from  other  places,  and  orders  were  sent  for 
all  that  could  be  obtained.  The  result  was  that  bins  were  nearly 
cleared  out  of  the  new  and  old  rye  by  direct  shipments  to  the  con- 
tinent of  Europe,  and  the  market  strengthened  under  that  demand 
to  the  highest  point  of  the  year.  It  was  beHeved  in  December  that 
most  of  the  "visible  supply"  of  rye  in  this  country  was  controlled 
by  one  firm  doing  business  in  Chicago. 

Barley  i- 

The  barley  market  had  not  recovered  from  the  demoralization 
which  set  in  after  the  panic  of  1873,  and  the  character  of  the  crop 
did  not  tend  to  improve  the  trade.  The  movement  was  much  larger 
in  volume.  The  receipts  were  4,716,360  bushels  in  1876,  against 
3,107,297  bushels  in  1875,  and  the  shipments  were  2,687,932  bushels, 
against  1,868,206  bushels  the  preceding  year.  The  market  was  dull 
and  dragged  badly  in  the  early  part  of  the  year.  The  crop  of  1875 
in  the  Northwest  was  of  poor  quality,  and  the  grading  of  No.  2  was 
low,  which  made  it  unpopular  with  maltsters  and  brewers.  On  the 
other  hand,  Canada  and  New  York  had  a  heavy  yield  of  good 
quality,  and  Eastern  consumers  were  supplied  chiefly  from  these 
sources,  buying  more  sparingly  in  the  West  than  usual,  while  the 
Canada  barley  competed  with  the  western  product  in  Chicago.  This 
condition  of  affairs  offered  little  encouragement  to  the  speculative 
trade  to  take  hold  of  it.  The  market  declined  to  the  unusually  low 
figure  of  51  cents  in  April,  which  induced  a  prominent  operator  to 
try  to  make  something  out  of  it  on  the  long  side  in  May.  But  the 
resulting  corner  of  that  month  was  far  from  being  a  success. 

The  cornering  firm  was  obliged  to  receive  large  quantities  of 
poor  stuff,  which  it  was  unable  to  dispose  of  then,  and  had  to  carry 
over  into  the  new-crop  year  at  a  heavy  loss.  Some  of  that  barley, 
delivered  at  95  cents,  was  sent  East,  and  sold  there  for  feed  at  40 
cents  per  bushel.  The  maltsters  did  not  regard  it  with  favor.  The 
new  crop  year  opened  with  a  large  stock  of  old  barley  in  Chicago, 


[1876]  OF  THE  CITY  OF  CHICAGO  543 

a  heavy  accumulation  of  old  malt  in  the  East,  and  a  good  deal  of 
common  malt  in  this  city.  The  new  crop  was  better  than  its  prede- 
cessor, but  still  poor  in  quality,  having  been  injured  by  bad  weather. 
The  crop  of  Iowa,  Illinois  and  Wisconsin  was  badly  stained,  and 
the  consequence  was  that  a  great  deal  of  it  passed  into  the  low 
grades. 

The  crop  was  very  freely  marketed  in  September,  and  inspected 
chiefly  as  No.  3  and  rejected.  The  crop  proved  to  be  very  deficient 
in  choice  brewing  barley,  and  Chicago  brewers,  being  more  particu- 
lar in  this  regard  than  most  of  their  Eastern  brethren,  turned  their 
attention  to  California.  About  400  carloads  (170,000  bushels)  were 
received  in  Chicago  and  sold  at  $1.15@1.25  per  bushel.  A  good  deal 
also  went  to  St.  Louis,  Cincinnati  and  New  York,  the  latter  by 
water,  and  one  cargo  of  it  was  received  in  Chicago  from  the  Atlantic 
seaboard.  The  California  crop  was  larger  than  in  any  former  year, 
and  superb  in  quality.  About  225,000  bushels  of  Canada  barley 
was  also  bought  for  this  market  at  $1.17@1.18.  Most  of  it  arrived 
by  lake  before  the  close  of  navigation. 

Flour   v' 
Prices  ranged  higher  for  flour  than  in  the  preceding  year,  but 
the  trade  was  dull  and  lifeless.     Spring  wheat  flours  became  more 
popular,  displacing  the  white  winter  wheat.     Receipts  of  flour  were 
2,955,197  barrels  and  the  city  manufacture  was  271,074  barrels. 

Seeds 

The  receipts  of  seeds  were  nearly  30  per  cent  larger  than  in 
1875.  Clover  seed  ruled  higher  under  a  good  demand,  largely  for 
export.  Timothy  commanded  from  $1.70@1.75  for  the  choice  seed 
of  the  new  crop  after  August.  The  flaxseed  crop  was  smaller  than 
in  1875,  but  prices  ranged  lower  throughout  the  year.  Seed  receipts 
were  96,890,420  pounds  and  shipments  82,344,295  pounds.  Flax- 
seed was  lowest  in  August  at  $1.15  and  highest  in  April  at  $1.55. 

Lumber 

Prices  of  lumber  ruled  low,  but  this  was  partly  counterbalanced 
by  low  freight  rates  and  generally  reduced  cost  of  production,  espe- 
cially for  those  who  owned  timber  lands.  Others  realized  but  little 
profit.  Lumber  receipts  were  1,039,785,265  feet  and  shipments 
were  576,124,287  feet. 

Hides 

The  total  receipts  of  hides  were  55,484,514  pounds  and  the  ship- 
ments were  59,102,027  pounds.  Dry  flint  hides  were  15  cents  in 
January,  but  receded  to  12@123^  cents  in  May,  at  which  price  they 
stood  until  December,  when  they  were  quoted  at  15@16  cents. 
Dry  salted  ranged  from  10  cents  to  13  cents  during  the  year  and 
green  salted  from  6j4  to  9]^  cents,  the  higher  prices  being  in 
December. 


S44  HISTORY  OF  THE  BOARD  OF  TRADE  [1877] 

Transportation  X 

Owing  to  rate  wars  between  the  railroads  freight  rates  were 
very  low,  the  competition  making  the  year  unprofitable  to  vessel 
owners.  During  this  competitive  war  rates  nominally  stood  at  20 
cents  per  hundred  pounds  on  grain  to  New  York,  but  these  rates 
were  shaded  to  14  cents  at  times.  West  bound  freight  rates  were 
also  very  low.  Arrivals  and  clearances  at  the  port  of  Chicago  were 
the  lowest  since  1864.  Lake  freights  by  sail  on  wheat,  per  bushel, 
to  Buffalo,  were  41/2  cents  in  April,  2  cents  in  July  and  August  and 
as  high  as  5  cents  in  October.  Lake  (steam)  and  rail  rates  to  New 
York  on  wheat,  per  bushel,  were  from  15  cents  in  May  to  9]^  cents 
in  August  and  14  cents  in  November.  All  rail  freights  on  grain,  per 
hundred  pounds,  to  New  York  were  45  cents  from  January  to 
March.  In  April  they  were  reduced  to  22^/2  cents  and  from  May 
until  December  18  were  at  20  cents,  being  raised  to  30  cents  the 
last  two  weeks  of  the  year.  These  were  the  open  rates,  but  as 
before  stated  they  were  often  shaded. 

1877 

At  the  annual  meeting,  held  on  January  16,  the  assets  of  the 
Board  of  Trade  were  shown  to  be  $167,841.16.  The  receipts  for 
the  year  were  $73,233.19  and  the  expenditures,  which  included 
$25,000  paid  for  city  certificates,  were  $98,186.27.  The  member- 
ship was  1,842,  and  the  assessment  for  the  year  was  fixed  at  $20.  The 
report  shows  that  a  considerable  source  of  income  had  been  cut  ofif 
when  the  initiation  fee  was  raised  to  $1,000  and  memberships  made 
transferable. 

In  their  report  the  Directors  dwelt  largely  upon  the  legal  affairs 
of  the  Board,  saying:  "At  the  beginning  of  the  year  four  suits 
against  the  Board  by  members  who  had  been  subjected  to  its  dis- 
cipline were  pending  in  the  Supreme  Court  of  the  state  on  appeal 
of  the  parties  against  whom  action  had  been  taken.  Two  of  these 
had  been  disposed  of  by  decisions  in  favor  of  the  Board  of  Trade, 
fully  confirming  its  power  to  discipline  its  members  under  its  own 
Tules.  In  the  principal  one  of  these  the  court  goes  so  far  as  to  decide 
that  the  courts  have  no  jurisdiction  to  review  the  acts  of  the  cor- 
poration in  such  matters. 

The  Directors  also  urged  change  in  the  inspection  laws,  say- 
ing that :  "The  protection  of  our  own  interests,  as  well  as  those  of 
the  vast  grain  districts  tributary  to  Chicago,  demand  that  vigorous 
measures  be  adopted  looking  to  the  restoration  to  the  Board  of  the 
right  to  classify  the  grain  handled  in  this  market. 

The  outlook  at  the  opening  of  the  year  was  not  of  the  brightest. 
Gold,  January  2,  went  below  $1.07,  carrying  other  prices  down  with 
it.  There  had  been  a  constant  downward  tendency  for  almost  a 
year.     In  March,  1876,  gold  was  quoted  at  one  time  at  $1.15,  and 


(1877]  .  OF  THE  CITY  OF  CHICAGO  S4S 

the  decline  later  had  been  gradual  but  steady.  In  April  it  was 
$1.13^,  in  May  and  June  $1.12%,  in  July  $1.12^,  in  August  $1.11%, 
in  September  and  October  $1.10'4>  in  November  $1.09%,  in  Decem- 
ber $1,083^  and  in  January,  1877,  a  fraction  over  $1.06.  The  fall 
was  so  gradual  that  the  variations  within  any  one  month  were 
small,  but  there  was  at  no  time  indication  of  a  speculative  rise. 
Another  cause  contributing  to  depression  was  the  long  drawn  out 
contest  over  the  presidency  between  Hayes  and  Tilden.  In  January 
a  compromise  plan  for  a  joint  commission  was  proposed,  and  this 
met  with  wide  approval  on  the  part  of  the  many  who  were  weary 
of  the  controversy.  It  was  this  which  gave  rise  to  the  resolution 
offered  by  J.  C.  Dore  as  follows:  "Resolved,  That  the  Board  of 
Trade  of  the  city  of  Chicago,  representing  largely  the  commercial 
and  manufacturing  interests  of  the  Northwest,  and  without  dis- 
tinction of  political  parties,  heartily  approves  the  report  of  the 
Joint  Congressional  Commission  for  the  final  determination  of  all 
questions  as  to  the  late  election  of  Presidential  electors  and  the 
counting  of  their  votes." 

The  markets  were  fairly  steady  until  the  spring  months,  but 
about  the  1st  of  April  there  was  a  sudden  rise  in  prices,  one  of  the 
disastrous  effects  of  which  was  to  cause  the  suspension  of  the  firm 
of  D.  H.  Lincoln  &  Company.  Mr.  Lincoln  was  the  newly  elected 
President  of  the  Board  of  Trade,  and  rumors  were  at  once  set  afloat 
that  he  would  tender  his  resignation.  He  gave  as  the  reason  for 
his  suspension  that  correspondents  had  failed  to  make  good  their 
margins,  and  stated  that  he  hoped  to  settle  his  accounts  by  the  sale 
of  real  estate.  Later  in  the  month  it  was  announced  that  a  settle- 
ment would  be  made  on  the  basis  of  25  cents  on  the  dollar.  Mr. 
Lincoln  did  not  resign,  but  continued  in  the  commission  business 
on  his  own  account,  retaining  his  office.  Early  in  January,  1878,  he 
was  again  caught  on  the  long  side  of  the  market,  and  was  forced 
to  suspend,  although  his  liabilities  did  not  exceed  $2,500.  It  was 
near  the  middle  of  April  when  the  cables  showed  that  a  European 
war  was  inevitable;  and  the  markets,  especially  for  wheat,  were 
excited  and  higher.  Continued  news  of  preparation  for  hostilities 
sent  the  market  climbing  upward.  On  the  24th  came  the  formal 
declaration  of  war  by  Russia  against  Turkey,  and  wheat  responded 
with  a  rise  of  9^/2  cents.  April  25  was  an  exciting  day  on  'Change, 
margins  were  called  up  to  $2,  the  war  news  created  intense  excite- 
ment and  it  was  a  trying  day  for  many.  Wheat  closed  at  the  regu- 
lar session,  April  24,  at  $1,663^  for  June  and  opened  April  25  at 
$1.75.  In  ten  minutes  seller  June  had  gone  to  $1.80,  a  high  sale 
being  recorded  at  $1.82,  but  the  day  closed  with  most  of  the  advance 
lost.  Only  two  failures  were  recorded,  but  the  Chicago  traders 
were  forced  to  admit  that  the  winners  were  "outsiders"  from  Mil- 
waukee and  the  Northwest.  It  was  estimated  that  margins  amount- 
ing to  nearly  $1,000,000  were  called  for  during  the  day.    The  excite- 


546  HISTORY  OF  THE  BOARD  OF  TRADE  [1877] 

ment  and  activity  continued  and  the  corn  and  wheat  traders 
exchanged  pits  in  order  to  accommodate  the  many  dealing  in  corn. 
This  excitement  did  not  last  long,  however,  and  trade  was  soon 
nearer  normal,  although  with  higher  price  levels  for  wheat  than 
early  in  the  year.  The  shipping  movement  was  aided,  in  May,  by 
a  marked  reduction  of  tolls  on  the  Erie  Canal.  The  rate  from  Buf- 
falo to  New  York  on  wheat  was  6j4  cents  and  on  corn  Syi  cents, 
including  tolls.  Corn  at  that  time  was  being  shipped  by  water  from 
Chicago  to  New  York  for  8^  cents  per  bushel.  The  war  had  little 
effect  on  prices  of  provisions  during  the  next  few  months,  and  in 
July  was  recorded  the  first  purchase  of  shoulders  known  to  have 
been  made  in  Chicago  for  the  Russian  army.  A  prosperous  state 
of  affairs  was  suddenly  brought  almost  to  a  full  stop  by  the  great 
railway  strike  which  began  in  the  East  about  July  19.  There  were 
riots,  with  considerable  loss  of  life,  at  Pittsburgh  and  Buffalo,  and 
the  strike  rapidly  spread  to  other  cities  and  to  other  industries, 
until  it  seemed  for  a  time  that  civil  war  was  imminent.  The  inter- 
ruption of  rail  shipments  quickly  affected  the  markets,  and  when, 
a  few  days  later,  the  strike  reached  Chicago,  there  was  great  depres- 
sion and  almost  an  entire  interruption  of  trade.  Members  of  the 
Board  were  embarrassed  also  by  receiving  many  advices  of  prop- 
erty which  had  been  shipped  to  them  and  drawn  against,  while 
they  could  not  touch  the  property,  and  therefore,  could  not,  in  all 
cases,  honor  the  drafts.  Shippers,  on  the  other  hand,  had  orders 
to  forward  grain  which  they  found  it  impossible  to  fill,  though  some 
of  them  had  already  purchased  the  property  and  paid  for  it.  It  was 
proposed  by  some  that  the  Board  be  closed  for  a  few  days.  The 
full  effect  of  the  strike  was  felt  in  Chicago  on  the  26th.  The  pack- 
ing industry  was  affected.  Men  who  continued  to  work  were  intimi- 
dated and  attacked  and  several  were  killed.  Halsted  Street  and  the 
vicinity  of  the  packing  houses  were  the  scenes  of  bloody  rioting, 
which  lasted  for  many  hours  and  which  was  participated  in  by  both 
men  and  women.  It  seemed  that  the  police  were  powerless  to  cope 
with  the  situation,  and  it  was  under  these  circumstances  that  Presi- 
dent D.  H.  Lincoln  called  a  special  meeting  of  the  Board  to  act 
upon  resolutions  previously  adopted  by  the  Board  of  Directors. 
The  resolutions  read :  "Whereas,  In  the  opinion  of  the  Board  of 
Directors,  owing  to  the  unsettled  condition  of  the  affairs  of  the  city 
and  the  country,  they  deem  the  continued  purchase  and  sale  of  prop- 
erty is  calculated  to  disturb  future  values  unjustly,  and  also  tends 
to  prevent  members  from  taking  part  in  the  defense  of  the  city; 
therefore.  Resolved,  That  the  Board  of  Directors  give  notice  that 
they  will  refuse  to  enforce  contracts  for  the  future  delivery  of  prop- 
erty made  until  further  notice.  Resolved,  Further,  That  the  mem- 
bers be  requested  to  come  to  the  rooms  of  the  Board  this  afternoon 
with  such  arms  as  they  can  procure,  and  as  far  as  possible  make 
arrangements  to  remain  in  this  room  as  their  headquarters  subject 


d 


[1877]  OF  THE  CITY  OF  CHICAGO  S47 

to  the  call  of  the  mayor  for  the  defense  of  the  city."  This  resolution 
was  adopted  with  great  cheering  and  the  members  at  once  left  the 
hall  to  arm  themselves  as  the  resolution  directed.  In  the  afternoon 
there  was  a  well  attended  meeting  of  members,  nearly  all  of  whom 
were  armed  and  ready  for  battle.  J.  W.  Rumsey  and  J.  B.  Dutch 
called  for  volunteers  to  relieve  the  battery  company,  and  29  mem- 
bers of  the  Board  responded  at  once.  They  were  formed  in  three 
squads  for  the  care  of  as  many  pieces  of  artillery.  Most  of  these 
Board  of  Trade  volunteers  had  been  members  of  Batteries  A  and  B, 
or  of  the  Board  of  Trade  battery  during  the  Civil  War.  It  was 
expected  that  Messrs.  Rumsey,  Dutch  and  Tichenor  would  com- 
mand the  squads.  David  Dickinson  took  the  names  of  85  additional 
volunteers  for  a  company  for  civic  protection.  These  volunteers 
and  other  members  of  the  Board  remained  at  the  Exchange  hall, 
under  arms,  the  greater  part  of  the  night,  but  there  was  no  call  for 
their  services  by  the  mayor,  and  they  returned  to  their  homes. 
While  not  called  upon  to  fight  to  maintain  law  and  order,  the  Board 
of  Trade  at  least  showed  its  loyalty,  and  there  is  no  question  that 
its  prompt  action  had  much  influence  in  restoring  peace  to  the 
city.  The  completeness  of  the  tie-up  in  Chicago  was  shown  by  the 
fact  that,  on  July  26,  there  was  but  one  car  of  stock  at  the  Union 
stock  yards.  In  the  afternoon  of  the  following  day  trading  was 
resumed,  but  the  strike  had  a  bad  effect  upon  trade  and  industry 
for  many  weeks.  After  the  strike  the  markets  were  comparatively 
steady  until  the  last  of  September,  when  a  corner  was  developed  in 
September  wheat.  Much  of  this  wheat  was  bought  in  the  90s  and 
much  sold  as  high  as  $1.18.  The  last  corner  of  the  year  of  any 
proportions  was  one  in  November  corn,  when  that  cereal  sold  up 
as  high  as  50  cents  and  contracts  were  defaulted  for  between  900,000 
and  1,000,000  bushels. 

The  Board  of  Trade  labored  with  the  many  phages  of  the 
inspection  problem  all  through  the  fore  part  of  the  year.  In  Febru- 
ary the  Board  was  reminded  of  the  shortcomings  of  the  state  inspec- 
tion system  by  a  decision  of  the  Supreme  Court,  which  held  that  the 
bondsmen  of  W.  F.  Tompkins,  former  chief  inspector,  were  not 
liable,  in  a  suit  brought  for  a  restituton  of  fees.  On  the  14th  of 
February,  the  Board  petitioned  the  legislature  asking  for  an  inquiry 
as  to  the  inspection  of  grain  with  a  view  to  some  modification  of  . 
the  law,  and  still  later  a  petition  was  circulated  against  compulsory 
state  inspection.  In  March  the  warehousemen,  seeing  the  futility 
of  further  resistance  gave  public  notice  on  'Change  that  they  would 
comply  with  the  Warehouse  law  after  that  date.  This  established 
the  state  rates  of  2  cents  per  bushel  for  the  first  thirty  days,  and  •  / 

J^  cent  per  bushel  for  each  subsequent  fifteen  days  or  part  thereof.  ^/ 

This  action  was  owing  to  the  decision  by  the  Supreme  Court  that 
the  law  was  constitutional,  and  this  same  decision  also  compelled 
the  railroads  to  deliver  grain  to  the  warehouse  to  which  it  was  con- 


,/ 


548  HISTORY  OF  THE  BOARD  OF  TRADE  [1877] 

signed.  On  March  5  there  was  an  important  meeting  held  in  the 
rooms  of  the  Arbitration  Committee  of  the  Board  of  Trade.  There 
were  present  the  joint  committee  of  the  legislature,  the  Railroad 
and  Warehouse  Commissioners,  members  of  the  Board  of  Trade, 
and  prominent  railroad  and  business  men,  and  the  object  of  the 
meeting  was  to  consider  the  whole  subject  of  grain  inspection. 
C.  E.  Culver  and  George  M.  How  addressed  the  meeting,  giving  the 
Board  of  Trade's  objection  to  the  law  as  it  stood.  Marvin  Hughitt 
of  the  Northwestern  Railway  stated  that  the  private  inspection  at 
Milwaukee  gave  more  satisfactory  results  than  the  state  inspection 
at  Chicago.  Julian  S.  Rumsey  told  of  the  circulation  of  a  petition 
for  the  removal  of  Inspector  Parker  on  account  of  mental  incapacity. 
A  letter  was  read  from  "Diamond  Joe"  Reynolds,  a  large  shipper, 
favoring  a  change  and  a  petition  of  8,000  names  was  presented 
opposing  the  law  as  it  stood.  On  the  other  hand  M.  S.  Bacon, 
P.  W.  Dater  and  W.  T.  Baker  supported  state  inspection.  A.  M. 
Wright  defended  the  right  of  the  Board  of  Trade  to  decide  as  to 
the  grades  of  grain,  and  a  bill  prepared  by  members  of  the  Board  of 
Trade  embodying  their  wishes  was  presented.  The  Joint  Commit- 
tee adjourned  to  reconvene  at  Springfield.  The  activity  for  and 
against  this  legislation  continued  all  through  March ;  C.  E.  Culver 
and  others  appeared  before  the  legislative  committee  favoring  the 
bill,  which  proposed  a  reduction  in  warehouse  rates,  and  William 
T.  Baker  issued  a  lengthy  open  letter  warning  against  "the  danger 
of  allowing  grain  brokers  to  fix  the  grading  system  at  Chicago." 
Much  legislation  was  proposed  afifecting  commercial  interests.  One 
bill  proposed  the  reduction  of  the  salaries  of  commissioners  from 
$3,500  to  $1,500  per  annum,  another  changed  the  storage  rate, 
another  was  directed  against  extortion  and  discrimination  at  stock 
yards,  and  still  another  proposed  to  abolish  the  doctoring  of  barley. 
••  The  bill  as  proposed  by  the  Board  of  Trade  was  rejected  by  the 
Senate  by  a  vote  of  17  to  27,  and  the  only  legislation  of  importance 
actually  effected  was  that  relative  to  warehouse  rates.  Following 
the  passage  of  this  law  the  Board,  on  May  23,  passed  a  resolution 
modifying  the  rules  to  conform  to  the  provisions  of  the  new  law, 
which  fixed  the  maximum  rates  of  storage  in  Warehouses  of  Class 
"A"  at  1^4  cents  per  bushel  for  the  first  ten  days  or  part  thereof, 
and  Yi  cent  per  bushel  for  each  subsequent  ten  days  or  part  thereof. 
During  the  year  there  was  much  dissatisfaction  with  the  inspection 
of  barley,  it  being  claimed  that  this  grain  required  expert  knoweldge 
and  that  there  was  wide  variance  in  the  grading  done  by  diflferent 
inspectors.  For  these  reasons  it  was  urged  that  one  assistant 
inspector  be  appointed  exclusively  for  the  barley  trade.  This  was 
conceded  by  the  Warehouse  Commissioners,  and,  on  August  1,  this 
exclusive  service  began,  the  Fulton,  Gelena,  Central,  C.  B.  &  Q.  and 
Rock  Island  elevators  being  designated  as  the  ones  in  which  barley 
was  to  be  stored.    Despite  all  legislation  to  the  contrary  there  was 


[1877]  OF  THE  CITY  OF  CHICAGO  549 

constant  trouble  as  to  railroad  discrimination  against  certain  ware- 
housemen. The  Union  elevator  was  on  the  railroad  blacklist,  and 
complaints  were  made,  in  February,  that  grain  consigned  to  that 
elevator  was  left  standing  on  the  tracks  because  the  Burlington 
Road  refused  to  deliver  it. 

The  provision  trade  also  presented  problems  of  its  own.  In 
February  there  was  considerable  agitation  for  the  registration  of 
provision  receipts  the  same  as  grain  receipts,  and  it  was  claimed 
that  there  were  many  abuses  in  the  way  of  over-issues  of  certificates. 
One  feature  of  the  provision  trade,  which  had  grown  from  a  small 
beginning  to  large  proportions,  was  the  shipments  of  fresh  meats 
and  live  stock  to  England.  Concerning  this  the  "Tribune"  of  Febru- 
ary 18  said  editorially :  "The  extent  of  the  trade  in  meats  is  very 
large,  although  only  in  its  infancy.  It  is  not  a  year  since  it  was 
demonstrated  that  the  newly  killed  animals  could  be  delivered  on 
the  other  side  of  the  ocean  in  good,  salable  condition,  yet  the  receipts 
of  a  single  week  at  Liverpool,  during  January,  included  11,270  cases 
of  fresh  meats,  equal  to  as  many  sheep;  500  tons  of  fresh  beef,  equal 
to  1,250  beasts;  919  quarters,  equal  to  180  beasts,  in  addition  to 
live  sheep  and  cattle,  pressed  meats,  hams,  etc.  The  excellent 
quality  of  the  meats  has  been  already  recognized,  and  a  new 
staple  added  to  American  commerce  of  which  Chicago  is  the  chief 
beneficiary."  Reference  to  the  beginnings  of  this  industry  by 
small  shipments  to  Glasgow  has  already  been  made. 

In  March  the  daily  "Commercial  Bulletin"  of  Chicago  pre- 
sented a  review  of  the  pork  packing  industry,  showing  that  the  total 
number  of  hogs  killed  for  the  year  preceding  from  March  1,  1876, 
to  March  1,  1877,  was  2,933,486;  total  number  packed  during  the 
summer  1,315,402,  with  average  net  weight  189.79  pounds,  and  the 
average  yield  of  lard  29.10  pounds.  The  number  the  preceding 
summer  was  728,781,  average  net  weight  176.19  pounds,  and  yield 
of  lard  26.77  pounds.  The  total  winter  packing  was  1,618,084  head, 
against  1,592,065  the  previous  year  and  1,690,348  two  years  before. 
The  yield  of  lard  during  the  regular  season  was  35.15  pounds  per 
head.  It  was  also  stated  that  the  facilities  for  summer  packing  had 
been  greatly  increased  and  that  many  packing  houses  had  secured 
ice  for  summer  packing,  that  the  direct  export  trade  had  been 
rapidly  increased,  and  that  the  low  freights  encouraged  the 
industry. 

The  "Commercial  Bulletin"  continued:  "Under  the  influence 
of  a  good  demand  on  foreign  account,  and  an  increased  speculative 
movement,  the  opening  of  the  regular  packing  season  found  the 
provision  market  in  a  comparatively  steady  condition,  with  the  bulk 
of  the  transactions  largely  for  future  delivery.  Packers  appeared 
to  be  willing  to  sell  their  product  with  considerable  freedom,  par- 
ticularly meats  and  lard,  which  were  the  principal  articles  manu- 
factured during  the  month  of  November  and  the  last  half  of  Decem- 


550  HISTORY  OF  THE  BOARD  OF  TRADE  [1877] 

ber.  Prices  ruled  with  considerable  firmness,  the  fluctuations  being 
slight.  About  the  latter  part  of  November  prices  receded  about 
25@50  cents  on  mess  pork,  5^@/4  cent  on  lard  and  about  %  cent 
on  the  various  cuts  of  meats.  During  the  early  part  of  December 
trading  was  largely  increased.  Under  the  belief  that  the  hog  crop 
was  deficient,  accompanied  with  the  report  of  the  destruction  of  pigs 
by  disease,  and  the  substantial  increase  exhibited  in  the  export 
movement  of  product,  outside  parties  were  induced  to  purchase 
largely  of  product  for  future  delivery.  Prices  gradually  improved 
from  day  to  day,  and  the  closing  figures  at  the  end  of  the  month 
showed  that  an  advance  of  $1  had  been  gained  in  mess  pork,  l@iy2 
cents  on  lard,  and  %@}i  cent  on  all  descriptions  of  meats.  With 
the  opening  of  the  new  year  the  market  continued  firm  and  prices 
further  advanced  during  the  first  week  in  January.  Packers  now 
viewed  the  situation  calmly  and  determined  to  make  a  change  in 
their  program.  The  demand  for  products  on  foreign  account  had 
slackened  considerably,  and  it  was  evident  to  them  that  merchants 
abroad  could  not  be  induced  to  enter  the  market  again  at  current 
prices,  especially  as  large  quantities  of  meats  previously  contracted 
for  were  en  route — sufficient  to  meet  foreign  demands  for  some 
time,  more  especially  as  the  stocks  abroad  were  reported  as  quite 
large.  The  stock  of  mess  pork  in  this  market  had  been  gradually 
increasing,  and  it  was  surmised  that  it  would  not  stand  the  strain 
put  upon  it.  Hogs  were  arriving  rather  sparingly,  but  packers  pur- 
chased the  better  qualities,  manufactured  mess  pork,  and  sold  large 
quantities  of  it  for  future  delivery.  About  the  middle  of  January 
it  became  evident  that  the  market  was  about  forced  to  extreme 
figures ;  many  parties  who  were  on  the  long  side  changed  front, 
but  moved  rather  cautiously.  Prices  gradually  weakened  as  the 
stocks  increased,  sales  were  unusually  liberal  for  future  delivery, 
even  at  the  declining  scale,  and  the  month  of  January  closed  with 
a  reduction  sustained  of  75@80  cents  on  mess  pork,  J/^  cent  on  lard 
and  J4  cent  on  meat.  About  the  first  of  February  the  stocks  of  meats 
in  Liverpool  were  reported  extremely  large;  consignments  which 
had  been  blocked  up  in  snowdrifts  in  the  Eastern  states  were  arriv- 
ing at  their  destination,  and  prices  declined  materially  in  that  mar- 
ket in  sympathy  with  the  reduction  submitted  to  here.  The  oiifer- 
ings  for  future  delivery  were  quite  heavy,  the  receipts  of  hogs 
increasing,  and  the  quality  improving,  and  some  operators  were 
disposed  to  close  out  their  contracts  and  withdraw  from  the  trade 
until  a  more  settled  state  of  affairs  existed.  This  added  to  the 
weakness,  and  by  the  middle  of  February  the  market  bordered  on 
a  panic.  Margins  were  freely  called  to  protect  trades,  and  this 
further  depressed  the  market,  because  it  forced  large  quantities  for 
sale  on  account  of  outside  parties.  So  rapid  was  the  reduction  that 
in  five  weeks  the  shrinkages  in  values  were  about  $4@4.25  on  mess 
pork,  1%@2  cents  on  lard,  and  1@1^  cents  on  meats.    During  the 


[1877]  OF  THE  CITY  OF  CHICAGO  SSI 

latter  part  of  the  month  and  season,  trading  was  not  so  active  and 
prices  improved  a  trifle,  closing  about  $1.50  lower  on  mess  pork, 
about  the  same  figure  on  lard,  and  ^@>4  cent  lower  on  meats  than 
were  current  at  the  opening  of  the  regular  packing  season." 

In  June  so  far  had  summer  packing  progressed  that  the  packers 
considered  making  all  product  "regular,"  whether  packed  in  sum- 
mer or  not.  They  decided  to  do  this  after  September  1,  1877,  if 
satisfactory  to  the  Board  of  Trade.  The  Directors  were  not  in 
favor  of  the  proposition,  but  referred  it  to  the  Board.  At  a  meet- 
ing of  the  Board  July  10  the  proposed  rule  was  discussed,  and  on 
July  20,  the  following  was  adopted:  "Hog  products  packed  between 
the  1st  of  November  and  the  1st  of  March  shall  alone  be  classed  as 
standard,  and  all  deliveries  of  products  cut  and  packed  on  and  after 
Nov.  1,  1877,  in  accordance  with  the  requirements  of  the  rules  of 
inspection  adopted  by  the  Board  of  Trade  shall  be  deemed  standard, 
and  shall  be  deliverable  on  regular  contracts  between  members  of 
this  association,  but  in  the  case  of  mess  pork  packed  between  March 
1  and  November  1,  200  pounds  of  green  meats  shall  be  packed  in 
each  barrel." 

"Long  clear  sides  shall  not  average  less  than  45  pounds;  short 
clear  sides  shall  not  average  less  than  40  pounds,  short  rib  sides 
shall  not  average  less  than  30  pounds,  dry  salted  shoulder  shall  not 
average  less  than  12  pounds  to  be  standard  and  regular  on  delivery, 
either  loose  or  boxed."  In  October,  it  was  stated  that  the  leading 
packers  were  establishing  agencies  in  Eastern  states  and  in  Europe, 
and  this  new  move  was  said  to  threaten  the  Commission  trade  of 
Chicago. 

Concerning  the  packing  industry,  the  report  of  the  Secretary, 
covering  the  year  1877,  said  in  part :  "The  number  of  firms  engaged 
in  the  business  was  on  the  decrease,  the  tendency  being  to  concen- 
tration. Four  firms  joined  their  forces  for  the  purpose  of  lessening 
the  competition  in  the  buying  of  hogs  and  the  selling  of  the  product. 
The  united  firm  had  a  capacity  for  killing  24,000  hogs  per  day.  It 
had  one  rival.  About  forty  other  firms  were  engaged  in  the  busi- 
ness, on  a  smaller  scale,  about  one  third  of  whom  bought  dressed 
hogs,  or  green  meats  for  curing,  or  had  their  hogs  killed  for  them 
on  commission.  Two  firms  packed  exclusively  on  English  account, 
and  three  or  four  others  did  a  mixed  business  in  the  same  direction, 
while  the  leading  houses  referred  to  above  established  agencies  at 
several  leading  cities  in  the  Old  World,  at  which  orders  were  taken 
for  direct  shipment.  The  united  packing  capacity  was  about  fifty 
thousand  hogs  per  day,  which  would  have  kept  more  than  6,000 
hands  employed,  if  hogs  enough  could  have  been  obtained  to  keep 
them  fully  occupied.  As  it  was,  they  employed  about  4,850  men, 
including  foremen,  and  clerks  during  the  four  winter  months,  and 
nearly  half  that  number  during  the  remainder  of  the  year.  The  ag- 
gregate weekly  wages  in  cold  weather  was  about  $48,000.    Wages 


552  HISTORY  OF  THE  BOARD  OF  TRADE  [1877] 

were  slightly  reduced  during  the  year,  and  were  in  the  neighborhood 
of  $8.50  per  week  on  the  average. 

The  year  was  an  exceedingly  active  one  in  beef.  The  value  of 
the  animal  product  was  about  $6,000,000  against  $3,300,000  in  1876, 
and  $2,623,200  in  1875.  This  included  packages  and  salt  where 
used.  The  capital  employed  was  about  $1,000,000  and  the  number 
of  hands  1,200,  who  drew  an  annual  wage  of  $565,000,  the  pay  rang- 
ing from  $1.25  to  $5  per  day.  The  increase  was  chiefly  due  to  an 
unprecedented  growth  of  the  business  of  compressing  and  canning 
beef,  which  rose  from  nothing  about  two  years  before  to  the  put- 
ting up  of  the  meat  of  nearly  1,000  beeves  per  day  in  the  most 
active  part  of  the  year.  Within  that  time  the  indomitable  Chicago 
packers  established  a  market  for  their  goods  in  England,  Germany, 
France,  Austria,  Italy,  Denmark,  Belgium,  and  in  several  cities  in 
South  America.  Their  products  were  used  extensively  in  the 
South  and  on  the  Pacific  Coast,  and  the  universal  favor  with  which 
the  new  material  was  received  warranted  the  expectation  of  a  con- 
tinued expansion  of  business.  About  200,000  beef  tongues  were 
put  up  during  the  year  by  one  firm,  most  of  which  went  to  the 
Pacific  Coast.  The  greater  portion  of  the  other  meat  was  exported 
to  foreign  countries. 

There  were  but  two  legal  proceedings  during  the  year  which 
greatly  affected  the  Board.  In  February,  the  Supreme  Court 
decided,  in  the  case  of  Corbett  vs.  Underwood,  that  margins  must 
be  kept  good  or  the  party  take  his  own  chances  of  being  sold  out ; 
and,  in  December,  W.  N.  Sturges  applied  to  the  courts  to  force 
the  Board  of  Directors  to  receive  his  complaint  against  George 
Webster,  the  Directors  not  acknowledging  Sturges'  standing  as  a 
member  on  account  of  the  litigation  of  1874. 

In  April,  the  old  dissension  as  to  a  call  of  grain  broke  out 
afresh ;  the  grain  men  were  opposed  to  this  call,  and  those  favoring 
it  proposed  to  raise  $25,000  to  open  a  call  board.  The  grain  men 
signed  an  agreement  not  to  attend  any  other  call  board,  and  on 
April  14  the  call  of  grain  was  abolished.  Relative  to  the  differences 
between  members  of  the  Board,  the  commercial  editor  of  the  Chi- 
cago "Tribune"  said  (April  19)  :  "The  'call'  difficulty  is  still  the 
subject  of  much  discussion  in  Board  of  Trade  circles.  The  opening 
of  the  Exchange  hall  at  half  past  two  o'clock,  instead  of  three,  gives 
intense  dissatisfaction  to  many  members  of  the  Board  of  Trade, 
and  that  feeling  is  understood  to  be  shared  by  some  of  the  Directors. 
The  effect  will  probably  be  to  still  further  widen  the  breach  between 
the  contending  parties.  The  leader  of  the  opposition  is  reported 
to  have  made  large  offers  of  grain  on  the  sidewalk  out  of  hours, 
with  a  view  to  testing  the  resolution  of  members,  and  is  under- 
stood to  be  very  anxious  to  extend  the  hours  of  trading.  Mean- 
while the  new  organization  is  understood  to  be  under  headway, 
preparing  to  commence  business  with  the  opening  of  the  coming 


[1877]  OF  THE  CITY  OF  CHICAGO  SS3 

month.  It  is  a  matter  for  sincere  regret  that  there  should  be  any 
division  or  divergence.  The  Board  of  Trade  ought  to  be  ample 
enough  to  afiford  scope  for  all  the  trading  in  produce  for  which 
there  is  any  need.  At  the  meeting  of  the  Call  Board  yesterday 
afternoon  the  President  and  Board  of  Directors  offered  their  resig- 
nations, which  were  not  accepted,  the  malcontents  joining  in  the 
negative  vote.  From  present  appearances  the  Board  will,  how- 
ever, go  to  pieces  unless  a  compromise  be  effected,  as  the  rooms  are 
held  by  the  men  who  favor  a  grain  call,  and  a  good  many  of  the 
members  have  refrained  from  paying  their  annual  dues.  It 
was  thought  possible  that  another  attempt  will  be  made  to  com- 
promise on  the  plan  of  selling  grain  back  as  well  as  forwards,  and 
also  to  call  rates  for  changing  from  one  month  to  another.  There 
is  still  other  talk  to  the  effect  that  the  'street'  commission  men  will 
join  the  new  organization,  and  give  it  a  numerical  start  it  could 
not  otherwise  attain."  By  the  first  of  May  a  new  Call  Board,  of 
which  W.  N.  Brainard  was  President,  had  been  organized,  and  met 
in  the  Colehour  Building  on  Washington  street.  At  the  first  ses- 
sion, held  on  May  1,  there  was  a  fair  representation  of  provision  and 
grain  dealers  present.  President  Brainard  delivered  an  inaugural 
address  in  which  he  spoke  of  the  controversy  with  the  former  Call 
Board,  and  said  they  had  avoided  unruly  contention  by  quietly  with- 
drawing from  the  old  association.  He  said  that  they  felt  that  an 
arbitrary  use  of  power  had  been  made  when  the  grain  call  was 
abolished,  and  invited  all  to  join  the  new  Board.  Another  develop- 
ment of  the  year  was  the  establishment  of  an  Open  Board  of  Trade 
in  the  second  story  of  123-125  La  Salle  street,  in  the  Watson  build- 
ing. This  was  said  to  be  open  to  all,  with  trading  in  1,000-busheI 
lots.  Among  the  other  items  in  the  current  history  of  the  Board  for 
the  year  1877  are  to  be  included  the  following:  On  February  14, 
the  Board  petitioned  Congress  to  appropriate  $500,000  for  the  pur- 
pose of  making  a  navigable  channel  between  the  East  River  and 
the  Hudson  River  at  New  York.  In  April  the  Chicago  Board  was 
much  interested  in  the  establishment  of  the  Board  of  Trade  of 
Omaha,  where  many  Chicago  traders  had  large  interests.  The 
directors,  in  May,  considered  a  proposition  to  remodel  the  old  build- 
ing in  order  to  enlarge  the  trading  hall.  This_p|-oposition  was 
brought  before  the  Board,  in  June,  and  was  defeated  by  a  vote  of 
504  to  146,  the  opinion  seeming  to  prevail  that  a  new  building  would 
soon  be  necessary.  In  June,  the  city  of  St.  John,  Halifax,  was  con- 
sumed by  fire.  The  Board  of  Trade  appointed  a  committee  consist- 
ing of  William  Richardson,  Robert  Warren,  Asa  Dow,  H.  C.  Ran- 
ney  and  I.  P.  Rumsey  to  solicit  funds  for  the  relief  of  the  city.  Mr. 
Richardson,  the  chairman  of  this  committee,  first  came  to  Chicago 
as  a  messenger  from  the  city  of  St.  John  to  the  stricken  city  of 
Chicago,  bringing  with  him  $10,000,  subscribed  by  the  Canadian 
city  for  the  relief  of  Chicago  in  1871,  and  it  was  thought  eminently 


554  -  HISTORY  OF  THE  BOARD  OF  TRADE  [1877] 

fitting  that  he  should  head  the  committee  for  the  relief  of  St.  John. 
In  a  short  time  the  sum  of  $4,600  was  subscribed  by  Board  of  Trade 
members.  In  August,  the  members  were  grieved  to  learn  of  the 
death,  in  New  York,  of  William  B.  Ogden,  the  first  mayor  of  Chi- 
cago and  for  many  years  its  most  prominent  citizen.  In  August, 
much  attention  was  given  to  the  rules  of  the  association,  and  a 
petition  was  presented  asking  the  repeal  of  that  part  of  the  rule 
relative  to  corners  providing  for  settlements,  which  it  was  claimed 
was  too  favorable  to  the  short  sellers  and  depressed  the  market. 
The  newspapers  were  filled  with  communications  for  and  against. 
The  proposed  amendments  were  balloted  on  and  defeated  by  a  vote 
of  420  to  279.  Another  movement,  which  was  successful,  was  to 
secure  the  changing  of  the  name  "Northwestern"  grade  to  "Hard"; 
the  commission  complied  with  this  request  and  the  change  was 
made  September  1.  The  favoritism  of  the  Chicago,  Milwaukee  & 
St.  Paul  Railway  for  Milwaukee  as  against  Chicago  was  alleged  to 
be  apparent,  and  a  committee  of  the  Chicago  council  began  an 
investigation.  It  was  stated  that  the  C.  M.  &  St.  P.  Ry.  ordered 
that  all  grain  shipped  to  Chicago  from  non-competitive  points  must 
be  bagged,  not  shipped  in  bulk.  In  October,  there  were  two  move- 
ments for  change  of  rules,  relative  to  puts  and  calls,  and  to  member- 
ship. In  response  to  the  first  movement  the  Board  of  Directors 
presented  the  following  resolution  for  the  approval  of  the  Board : 
Whereas,  the  purchase  and  sale  of  privileges  to  deliver  or  receive 
grain  or  provisions  is  prohibited  by  the  statutes  of  this  state,  and 
such  contracts  are  declared  to  be  null  and  void,  and  are  liable,  if 
transferred,  to  be  so  declared  by  the  courts — therefore,  in  order  to 
eliminate  so  far  as  possible  this  mode  of  trading  from  legitimate 
operations  of  the  members  of  this  Board,  be  it  resolved  that  the 
Board  of  Directors  will  refuse  to  recognize  as  a  valid  contract  under 
the  rules  of  the  Board  of  Trade  any  contract  hereafter  made  based 
upon  or  growing  out  of  what  are  known  as  "puts  and  calls,"  or 
"privileges,"  and  any  member  transferring  to  an  innocent  party  a 
contract  known  by  him  to  be  based  upon  a  privilege  shall  be  deemed 
guilty  of  practicing  fraud,  and  shall  be  liable  to  the  penalties  pre- 
scribed by  fraud  or  bad  faith."  The  directors  also  passed  a  resolu- 
tion providing  for  the  purchase  of  memberships  by  the  Board  when 
desired.  This  proposition,  however,  was  defeated  by  a  vote  of 
431  to  203.  At  this  time  an  Exchange  membership  was  quoted  at 
$350.  In  November,  occurred  the  death  of  W.  F.  Coolbaugh,  presi- 
dent of  the  Clearing  House,  and  the  Board  of  Trade  showed  its 
respect  by  adjourning  at  noon  to  attend  the  funeral. 

The  trade  history  of  Chicago  during  1877  was  one  of  much 
greater  interest  than  usual,  as  it  was  developed  amid  more  than 
ordinary  uncertainty.  In  the  early  part  of  the  year  the  presidential 
question  loomed  up,  depressing  business  seriously.  Scarcely  was 
this  disposed  of  when  the  trump  of  war  was  sounded  in  Europe, 


C1877]  OF  THE  CITY  OF  CHICAGO  SSS 

and  then  commenced  a  contest  between  Russia  and  Turkey,  its 
intense  actualities  in  the  Old  World,  and  little  more  than  immense 
possibilities  in  the  New,  keeping  the  people  in  a  state  of  continual 
suspense.  As  the  war  cloud  in  the  Orient  lifted,  enabling  the  rela- 
tive strength  of  the  combatants  to  be  seen,  the  rain-cloud  formed 
in  the  West. 

The  produce  trade  of  the  year  was  a  fairly  active  one  in  most 
departments,  and  on  the  whole  compared  favorably  with  that  of 
former  years,  though  the  figures  showed  a  decrease  in  values. 
Measured  by  volume  the  trade  was  less  than  that  of  1876  in  the 
aggregate,  which  was  nearly  compensated  by  an  increase  in  prices 
chiefly  in  wheat  and  flour,  that  fact  being  partially  traceable  to 
excitement  with  regard  to  the  war  in  the  Orient.  Chicago  lost  in 
the  number  of  hogs  handled,  and  fell  behind  very  much  in  the  cash 
proceeds,  because  of  the  persistent  way  in  which  the  hogs  kept 
marching  down  towards  hard  pan.  The  course  of  trading  was  some- 
what less  steady,  as  the  war  unsettled  quotations,  though  less  vio- 
lently than  might  have  been  expected,  with  the  exception  of  wheat 
and  flour.  Still  there  were  very  few  failures  in  the  trade,  albeit  the 
longs  and  the  shorts  were  alternately  pressed  rather  closely  to  the 
wall.  The  "corner"  in  its  old-fashioned  sense  was  unknown,  though 
pork  and  corn  once,  and  wheat  three  or  four  times,  were  in  the 
power  of  the  few  as  against  the  many. 

Among  the  more  noteworthy  incidents  of  the  year  afifecting  the 
general  trade  in  produce,  we  may  note  the  following:  the  partial 
failure  of  the  California  wheat  crop,  due  to  drought  in  the  early 
months  of  the  year;  the  war  excitement  during  the  early  spring, 
which  culminated  in  the  declaration  of  war  by  Russia,  an  act  that 
was  followed  by  a  general  upward  movement  in  prices  here  and  a 
series  of  terrible  struggles  on  Turkish  soil ;  the  great  strike  which 
paralyzed  industry  in  many  parts  of  the  United  States  during  the 
last  week  of  July  and  clogged  the  wheels  of  transportation  by  rail 
for  several  weeks  afterwards,  besides  involving  the  destruction  of 
large  quantities  of  produce  owned  in  Chicago ;  a  change  in  the  rates 
of  grain  storage,  which  invited  to  a  more  rapid  and  extensive  han- 
dling of  breadstufifs  in  this  city ;  a  decision  by  the  Supreme  Court 
of  this  state,  affirming  the  validity  of  contracts  for  the  future  de- 
livery of  produce ;  a  spell  of  two  and  a  half  months  of  bad  weather 
in  the  autumn  and  winter,  which  very  much  lessened  the  volume  of 
receipts,  as  it  made  the  country  roads  impassable ;  and  a  marked 
falling  off,  in  the  latter  part  of  the  year,  in  the  volume  of  mere 
speculative  trading  on  'Change. 

The  effect  of  the  riots  on  the  produce  movement  was  far  more 
than  temporary.  So  many  railroad  cars  were  destroyed  that  the 
working  capacity  of  the  roads  was  lessened  in  the  fall  and  great 
quantities  of  grain  were  held  back,  or  sought  a  market  elsewhere, 
simply  because  cars  could  not  be  furnished  to  bring  it  to  Chicago. 


556  /  HISTORY  OF  THE  BOARD  OF  TRADE  [1877] 

But  for  this  the  produce  trade  would  have  been  much  larger  in 
the  last  half  of  the  year,  as  lake  freights  were  kept  down  to  so  low 
a  point  that  the  cut-off  railroads  could  not  successfully  compete 
with  the  water  route  during  the  season  of  navigation,  though  under- 
cutting of  rates  and  underbilling  of  weights  from  country  points 
were  freely  practiced.  Another  marked  attraction  to  the  grain  to 
come  to  Chicago  was  the  fact  that,  with  the  first  of  July,  the  charges 
for  first  storage  in  this  city  were  reduced  to  1^4  cents  per  bushel 
for  ten  days,  instead  of  2  cents  for  twenty  days,  as  formerly.  Ten 
days  being  sufficient  for  the  transfer  of  all  grain  not  intended  to  be 
sold  here,  there  was  a  saving  of  %  cent  per  bushel,  under  the  new 
arrangement,  which,  with  the  advantage  of  Chicago  as  a  speculative 
market,  was  sufficient  to  make  it  worth  while  to  hold  large  quanti- 
ties here  on  subsequent  storage.  By  virtue  of  her  commanding 
position  and  her  railway  systems,  Chicago  controlled  the  produce 
trade  of  the  West.  A  few  years  before  merchants  of  the  South  and 
of  Europe  sent  their  orders  to  New  York.  In  1877  they  were  sent 
direct  to  Chicago,  and  filled  by  consignments  on  through  bills  of 
lading,  without  the  aid  of  dealers  on  the  seaboard. 

The  rates  of  lake  freights  were  so  low  during  1876  that  a 
reaction  was  deemed  to  be  more  than  probable.  The  expectation 
was  scarcely  justified,  but  the  market  grew  a  little  better.  It 
opened  February  10  at  4  cents  on  corn  and  declined  to  lyi  cents  on 
June  20,  which  was  the  lowest  rate  of  the  previous  year.  A  great 
many  vessels  were  chartered  at  1%  cents.  The  highest  corn  rate 
of  the  season  was  5)4  cents,  taken  October  8,  against  4)^  cents  the 
previous  year.    The  closing  price  was  4  cents. 

At  the  close  of  the  year  wheat  to  Buffalo  was  taken  at  5  cents 
to  load  immediately  and  go  out  in  the  spring.  Freight  from  Buffalo 
to  New  York  via  Erie  Canal  averaged  7  41/100  cents  for  the  year. 
The  "season"  of  navigation  might  have  been  extended  another 
month  had  vessel  owners  been  able  to  foresee  the  extraordinary 
weather  of  November  and  December.  The  stormy  spell  in  the  first 
half  of  November  induced  owners  of  lake  craft  to  lay  up  those  not 
already  in  winter  quarters,  but  after  that  the  weather  was  uniformly 
mild  almost  to  the  close  of  the  year. 

Wheat. — The  wheat  market  was  quite  excited  during  a  con- 
siderable part  of  the  year.  Lack  of  stock  of  the  old  crop,  and  lack 
of  confidence  in  the  ability  to  judge  the  situation  correctly  on  the 
movement  of  the  new  crop  were  the  chief  causes  of  lessened  trad- 
ing, while  a  radical  change  in  the  value  of  the  yield,  and  anxiety 
with  reference  to  the  issue  of  the  war  in  the  East,  made  the  market 
irregular,  giving  it  a  much  wider  range  than  in  the  three  years  next 
preceding,  and  prices  averaged  higher  than  in  any  other  year  since 
the  panic  of  1873. 

The  movement  of  wheat  was  much  less  in  volume  than  that  of 
1876.     The  receipts  of  wheat,  as  reported  by  the  Secretary  of  the 


(1877]  OF  THE  CITY  OF  CHICAGO  557 

Board  of  Trade,  were  14,164,515  bushels,  against  16,574,058  bushels 
in  1876.  The  shipments  were  14,909,160  bushels,  against  14,361,950 
bushels  the  previous  year. 

The  course  of  the  market  was  irregular,  and  its  character  more 
artificial  than  in  years  just  previous.  Early  in  the  winter  of  1876  a 
powerful  combination  took  hold  on  the  long  side,  the  reason  being 
not  so  much  anticipation  of  war  in  the  Old  World  as  the  belief  that 
there  was  a  short  supply  in  Europe  as  well  as  the  United  States, 
which  was  verified  by  the  event.  In  December,  1876,  the  market 
ruled  strong  on  this  account,  and  was  further  excited  in  January  by 
reports  of  drought  in  California  and  widespread  fears  of  a  failure  in 
the  wheat  crop  of  the  Pacific  Coast.  The  reports  from  that  section 
were  more  reassuring  in  February,  and  towards  the  close  of  that 
month  the  bull  party  found  that  the  load  was  too  heavy.  Then 
rumors  of  short  crops  all  over  the  civilized  world  and  empty  store- 
houses at  Odessa  inspired  renewed  confidence,  causing  another 
season  of  strength  here  and  in  Milwaukee.  During  the  first  three 
months  of  the  year  the  market  averaged  very  nearly  the  same  as 
the  maximum  of  the  three  preceding  years,  and  yet  the  war  question 
seemed  to  have  little  decided  influence  on  quotations.  There  were 
plenty  of  war  rumors,  but  the  great  majority  of  operators  professed 
to  believe  that  war  would  probably  be  averted  by  the  good  offices 
of  the  Great  Powers  south  of  Russia.  In  April  it  became  evident 
that  there  would  be  a  rupture,  and  quotations  mounted  rapidly  under 
a  general  rush  to  buy.  By  the  time  war  was  declared  (April  24) 
the  excitement  was  at  fever  heat,  though  it  was  known  that 
Russian  holders  were  marketing  their  wheat  with  such  celerity 
as  to  act  as  a  drag  on  the  upward  movement  of  quotations  in 
Europe.  During  April  the  market  advanced  fully  50  cents  per 
bushel. 

The  demoralization  that  ensued  was  long  remembered  on 
'Change.  There  were  few  failures,  but  this  was  because  the  ma- 
jority of  operators  had  pursued  a  more  conservative  course  than 
usual — knowing  the  greater  uncertainty  of  the  situation  in  wheat 
than  in  other  markets.  There  were  not  wanting  incidents  that 
showed  how  completely  even  shrewd  men  could  be  carried  off  their 
mental  equilibrium  by  the  excitement.  The  instance  was  cited  of 
an  operator  who  had  a  clear  profit  of  about  $120,000  on  his  deals. 
Instead  of  selling  to  willing  buyers  he  doubled  his  hold,  almost  at 
the  highest  notch,  and  within  a  few  hours  the  receding  tide  had 
swept  away  every  cent  of  his  profits. 

The  trade  evened  up  rapidly,  by  settlement  or  otherwise,  and 
then  the  market  was  nearly  deserted  for  two  or  three  weeks,  as 
commission  men  generally  declined  to  take  the  risk  of  trading  for 
parties  outside,  who  could  not  be  reached  on  the  instant.  What 
trading  was  done  was  required  to  be  protected  by  very  large 
margins.     As  prices  declined   the   wheat  moved   out   more   freely. 


558  HISTORY  OF  THE  BOARD  OF  TRADE  [18771 

and  stocks  were  worked  down  to  a  low  point.  Then  favorable 
weather  gave  assurance  of  a  more  than  average  yield  for  the  grow- 
ing crop,  while  it  was  found  that  Great  Britain  was  drawing  more 
largely  than  usual  on  the  other  sources  for  her  supplies,  the  Rus- 
sian wheat  finding  an  outlet  on  the  Baltic.  The  market  now  be- 
came sharply  bearish,  and  prices  rapidly  declined  till  in  August 
wheat  sold  for  September  delivery  at  91j4  cents,  though  the  low- 
est price  for  the  current  month  (August)  was  about  96  cents.  But 
in  attaining  these  very  low  figures  the  market  was  largely  oversold,, 
and  a  reaction  came  when  the  shorts  wanted  to  fill.  The  new  wheat 
did  not  come  forward  so  freely  in  August  as  was  anticipated,  and 
the  same  condition  obtained  on  the  seaboard.  From  the  20th, 
which  was  the  date  of  the  lowest  quotations,  the  market  reacted 
to  $1.11  for  cash  wheat  at  the  close  of  the  month. 

In  September,  the  shorts  were  caught  even  worse.  They  had 
sold  freely  for  that  month  only  to  find  the  demand  greater  than 
the  supply,  and  wheat,  which  sold  at  $1.02^/^  on  the  4th,  in  the 
expectation  of  big  receipts  and  a  consequent  big  break,  was  set- 
tled at  $1.18  at  the  close  of  the  month.  In  October  the  experience 
was  repeated,  the  only  variation  being  in  prices,  the  market  for  that 
month  closing  at  $1.14,  with  a  rather  large  shortage  to  be  filled  dur- 
ing the  last  two  or  three  days.  In  November  there  was  a  continued 
good  demand  for  cash  wheat  up  to  the  close  of  navigation,  which 
sustained  quotations  on  futures,  especially  as  bad  weather  kept 
down  the  volume  of  receipts.  In  December,  the  weather  continued 
open,  so  that  the  wheat  did  not  come  forward  so  freely  as  expected, 
and  there  was  a  moderate  export  demand,  as  cut  rates  on  through 
shipment  permitted  the  grain  to  be  moved  at  a  profit.  The  market 
was  very  nervous  the  last  month  of  the  year,  owing  to  the  uncer- 
tainty with  regard  to  the  war  in  Europe,  but  tended  slowly  down- 
wards till  toward  Christmas,  when  it  was  excited  by  fears  of  Eng- 
lish intervention  in  the  Turkish  question,  and  weakened  badly  in 
the  last  week  of  the  year,  as  peace  prospects  were  considered  more 
flattering,  and  the  crop  was  reported  to  be  35,000,000  bushels  larger 
than  any  previous  estimate. 

Corn. — The  course  of  the  corn  market  has  been  generally  a 
steady  one,  outside  the  fluctuations  due  to  war  news.  Prices  aver- 
aged nearly  the  same  as  the  previous  year,  though  the  range  was 
much  greater.  The  volume  of  the  movement  was  also  very  large, 
though  it  showed  a  decrease  from  that  of  1876.  The  receipts  were 
47,915,728  bushels  against  48,668,640  bushels  in  1876,  and  the  ship- 
ments 46,361,901  bushels  against  45,629,035  bushels  for  the  year 
immediately  preceding. 

Receipts  of  corn  in  the  early  summer  were  somewhat  less  than 
they  would  have  been  but  for  the  fears  that  the  new  corn  crop 
would  be  a  partial  failure.  It  was  widely  believed  that  much  of  the 
corn  was  planted  so  late,  and  the  planting  was  followed  by  such  cool 


[1877]  OF  THE  CITY  OF  CHICAGO  559 

weather,  that  the  crop  would  not  mature  before  overtaken  by  the 
frosts  of  autumn.  This,  with  the  probabiHty  that  the  supply  of 
Danubian  corn  to  Western  Europe  would  fall  short  the  coming 
year,  on  account  of  the  interruption  of  agricultural  operations  in 
European  Turkey,  made  a  good  many  holders  careless  about  selling, 
especially  as  the  corn  crop  of  1876  was  well  adapted  to  storing.  But 
the  splendid  weather  of  August  and  September  removed  all  fears 
as  to  our  own  corn  crop,  and  then  farmers  sold  more  freely,  their 
deliveries  being  limited  only  by  the  carrying  capacities  of  the  rail- 
roads, which  had  been  somewhat  reduced  by  the  strike.  Weather 
conditions  were  poor  in  November  so  that  the  new  corn  came  for- 
ward slowly,  and  an  extensive  corner  engineered  successfully,  the 
market  closing  at  50  cents.  The  market  was  weak  at  the  close  of 
the  year. 

Oats. — The  market  for  oats  exhibited  an  improvement,  though 
the  movement  through  the  city  was  only  slightly  larger  in  volume, 
and  the  average  of  prices  very  nearly  that  of  the  preceding  year. 
The  receipts  were  13,506,773  bushels  against  13,030,121  bushels  in 
1876,  and  the  shipments  were  12,497,612  bushels  against  11,271,642 
the  preceding  year.  The  chief  difference  was  due  to  the  superior 
quality  of  the  oats  of  the  new  crop,  which  permitted  the  inspection 
of  a  much  larger  percentage  into  the  higher  grades  than  was  pos- 
sible with  the  crop  next  preceding.  The  course  of  the  market  was 
irregular,  the  range — 24  cents — being  three  times  as  great  as  in  1876. 
The  chief  reasons  for  this  were  the  Eastern  war  in  the  first  half 
of  the  year,  and  an  abundant  crop,  much  of  which  was  marketed  in 
the  autumn.  There  were  no  corners  in  oats,  though  cash  lots  com- 
manded a  rather  wide  premium  at  times.  There  was  little  tempta- 
tion to  run  a  corner  in  oats  on  the  old  crop,  and  no  opportunity  for 
doing  so  after  the  new  crop  began  to  move. 

The  quality  of  the  crop  of  1876  was  so  poor  that  oats  were 
largely  avoided  by  consumers — they  substituted  corn  for  them  in 
feeding  to  a  very  large  extent,  and  the  export  movement  to  Europe, 
which  had  previously  been  a  free  one,  fell  to  zero.  They  were  little 
better  than  husks  and  the  English  people  did  not  want  them  at  any 
price.  Oats  that  weighed  only  25-26  pounds  to  the  measured  bushel 
were  graded  as  No.  2  and  yet  the  proportion  of  low  grades  was 
excessive.  In  May  the  market  advanced  to  46  cents  on  the  4th  of 
that  month,  which  was  the  highest  point  of  the  year.  It  then  de- 
clined irregularly  on  rather  light  receipts,  and  went  down  rapidly 
as  it  became  known  that  the  new  crop  was  a  large  one.  It  touched 
22  cents  for  the  month  on  the  20th  of  August,  the  subsequent  aver- 
age being  not  far  from  24^^  cents  for  No.  2  with  a  premium  of  1 
cent  on  No.  2  white,  and  a  discount  of  3@3j^  cents  on  rejected.  The 
price  per  pound  was  so  low,  compared  with  wheat  and  corn,  that  it 
was  expected  there  would  be  a  liberal  export  movement.  In  this 
there  was  a  disappointment.    There  was,  however,  a  good  demand 


560  HISTORY  OF  THE  BOARD  OF  TRADE  [1877] 

for  American  oatmeal  in  Europe,  and  the  direct  export  of  this  bread- 
stuff from  Chicago  formed  a  new  feature  in  the  trade  during  the 
autumn.  The  United  Kingdom  also  took  meal  from  American  oats 
which  were  ground  in  Canadian  mills.  The  farmers  marketed  the 
new  oats  rather  freely,  but  stocks  were  kept  down  to  a  low  point, 
under  a  free  shipping  movement. 

Rye. — The  volume  of  rye  handled  exhibited  a  material  increase 
over  that  of  the  preceding  year,  and  was  more  than  double  that  of 
■1875.  The  receipts  were  1,728,865  bushels  against  1,447,917  bushels 
in  1876,  and  the  shipments  were  1,553,375  bushels  against  1,433,976 
bushels  the  year  preceding.  The  quality  of  the  old  crop  was  only 
fair,  the  berry  scarcely  filling  out,  while  the  supply  was  rather  large. 
Hence  the  market  dragged  during  the  first  three  months  of  the  year, 
the  local  trade  being  very  small,  while  exporters  only  bought  spar- 
ingly, and  stocks  accumulated  in  consequence.  In  April  speculators 
took  hold  of  the  market  under  the  war  excitement,  buying  for  future, 
and  the  price  of  June  delivery  advanced  to  96  cents.  The  war  fever 
soon  cooled,  however,  and  the  market  declined  rapidly.  At  65  cents 
exporters  commenced  to  buy,  and  they  had  taken  about  all  the  old 
stock  by  the  time  the  market  touched  62  cents  in  July.  About  the 
20th  of  that  month  then  new  rye  began  to  arrive,  and  the  good 
quality  invited  some  rather  heavy  purchases.  In  the  latter  part  of 
the  season  there  was  comparatively  little  doing  in  futures,  as  former 
losses  made  buyers  wary. 

Barley. — The  barley  market  ruled  more  steady  than  had  been 
expected  in  the  excitement  of  the  surroundings ;  the  range  of  prices 
was  about  50  cents.  The  movement  was  larger,  the  receipts  being 
4,990,379  bushels  and  the  shipments  4,213,656  bushels.  The  market 
dragged  badly  during  the  first  three  months.  The  old  crop  was  very 
poor  in  quality,  and  about  all  the  good  barley  had  been  marketed  by 
the  end  of  1876.  The  malsters  avoided  western  grain,  using  Cana- 
dian barley  in  its  stead  to  a  very  large  extent.  The  consequence  was 
that  stocks  accumulated  in  Chicago  during  the  winter,  being  mostly 
held  on  speculation.  Under  a  "squeeze"  the  quotation  was  run  up 
to  85  cents  at  the  close  of  April,  the  manipulators  being  helped  by 
the  war  excitement.  The  next  month  prices  were  pretty  well 
sustained,  in  sympathy  with  other  grain,  but  soon  the  market 
began  to  drag  and  settled  down  to  a  nominal  quotation  of  50@55 
cents  for  old  No.  2  in  the  middle  of  June.  At  this  point  the  mar- 
ket for  new  No.  2  for  September  delivery  opened  at  about  92^ 
cents,  but  was  very  uncertain  for  several  weeks,  as  dealers  were 
unsettled  in  regard  to  the  new  inspection.  After  the  new  arrange- 
ment was  made,  under  which  all  barley  was  to  be  inspected  by 
one  inspector,  and  certain  elevators  designated  in  which  barley 
was  to  be  stored,  the  market  became  more  settled;  but  at  the  close 
of  the  year  No.  2  barley  had  declined  to  57  cents  per  bushel. 


[1878]  OF  THE  CITY  OF  CHICAGO  561 

1878. 

At  the  opening  of  the  year  1878  there  were  many  evidences  of 
hard  times  throughout  the  country.  There  were  numerous  busi- 
ness failures  at  all  the  leading  commercial  centers,  and,  while  Chi- 
cago suffered,  its  record  was  much  better  than  that  of  other  cities 
of  its  class.  According  to  the  figures  given  by  Tappan,  McKillop 
&  Company,  in  January,  1878,  the  total  number  of  Chicago  business 
failures  during  1877  was  361,  with  total  liabilities  at  $30,857,938. 
Among  those  who  had  met  business  reverses  were  twenty  three 
commission  merchants,  with  liabilities  of  $454,990,  and  eight 
packers  and  provision  dealers  with  liabilities  of  $826,419. 

At  the  annual  election,  held  January  7,  1878,  there  were  several 
tickets  in  the  field,  and  the  vote  was  the  largest  the  Board  had 
known.  N.  K.  Fairbank  was  elected  President,  receiving  a  vote 
of  628  to  383  cast  for  Murry  Nelson.  John  H.  Dwight  was  elected 
Second  Vice-President,  and  the  new  Directors  were  C.  H.  Adams, 
C.  D.  Hamill,  W.  S.  Crosby,  E.  I.  Wheeler  and  Thomas  Heermans. 
N.  E.  Piatt  was  elected  for  one  year  to  fill  the  unexpired  term  of 
J.  H.  Hurlbut,  resigned.  At  the  annual  meeting,  held  on  January 
14,  the  Directors  gave  an  account  of  their  stewardship,  showing 
receipts  of  $79,159.15,  and  disbursements,  for  ordinary  expenses, 
$64,944.53,  and  for  extraordinary  expenses  of  $18,441.79.  This 
latter  included  a  donation  of  $1,000  to  United  States  soldiers,  and 
$15,000  expended  for  Chicago  seven  per  cent  certificates.  The 
assets  were  given  as  $176,903.59,  a  gain  of  $9,062.43  during  the 
year.  The  assessment  was  fixed  at  $20  and  the  membership  was 
1,831.  The  Directors  commented  upon  the  fact  that  whereas  the 
members'  initiation  fee  was  $1,000,  under  the  new  rules  member- 
ships were  actually  obtained  through  transfer  for  about  one-third 
that  sum,  and  it  was  suggested  that  some  action  be  taken  to 
appreciate  the  value  of  memberships.  Owing  to  the  financial  diffi- 
culty under  which  D.  H.  Lincoln,  President  of  the  Board,  was 
then  laboring,  he  did  not  preside  at  the  annual  meeting  and  the 
report  of  the  Directors  is  signed  by  Josiah  Stiles,  as  First  Vice- 
President. 

Prices  had  been  steadily  declining,  as  currency  approached 
nearer  and  nearer  to  the  gold  basis,  and  this  downward  tendency 
was  strengthened  the  middle  of  January  by  rumors  that  peace 
was  about  to  be  declared  in  Europe.  This  was  counteracted  by  a 
sharp  upturn,  and  it  was  believed,  the  latter  part  of  the  month, 
that  England  would  surely  enter  the  war  as  an  enemy  of  Russia. 
The  market  was  without  particular  excitement,  however,  until 
May,  when  a  corner  in  No.  2  spring  wheat  was  threatened,  which 
for  a  time  forced  the  price  to  $1.05,  this  being  4  cents  higher  than 
the  price  in  Milwaukee.  On  account  of  the  attractive  price  bring- 
ing large  receipt,  and  for  other  reasons,   the  manipulators   failed 


562  HISTORY  OF  THE  BOARD  OF  TRADE  [1878] 

in  their  purpose  and  spot  wheat  fell  6  cents  and  then  declined  2 
cents  more  and  the  market  closed  May  31  at  98  cents. 

The  most  sensational  market  feature  of  the  year  was  a  July 
corner  in  No.  2  spring  wheat,  both  in  Milwaukee  and  Chicago. 
The  effect  of  this  manipulation  was  to  make  the  price  of  No.  2 
spring  wheat,  the  speculative  grade,  at  least  10  cents  higher  than 
winter  wheat,  which  was  considered  of  superior  quality,  and 
usually  commanded  a  premium.  This  led  to  a  peculiar  state  of 
affairs.  Under  the  rules  mixed  grades  took  the  grade  of  the  inferior 
part  of  the  mixture.  The  shorts  sought  to  take  advantage  of  this 
by  mixing  a  small  quantity  of  spring  wheat  with  winter  wheat,  and 
thus  having  the  whole  inspected  as  spring  wheat  and  deliverable 
on  contracts.  Toward  the  end  of  the  month  it  was  noticed  that 
a  number  of  cars  of  winter  wheat  were  coming  in  with  a  few  bushels 
of  spring  wheat  carelessly  mixed  in  with  the  top  layer  of  winter, 
so  that  the  inspectors  were  obliged  to  grade  it  spring  wheat,  reduc- 
ing its  quality,  but  at  the  same  time  adding  about  $40  to  the  value 
of  each  carload.  The  financial  writers  agreed  that  this  could  be 
utilized  by  the  shorts  to  fill  contracts,  as  it  was  admissible  to  fill 
a  contract  with  a  better  article  than  the  one  called  for.  At  first  this 
trick  was  laid  to  the  "countrymen,"  but  later  it  was  stated  that 
a  canal  boat  load  of  winter  wheat  (about  6,000  bushels)  was  with- 
drawn from  one  elevator,  towed  about  the  river  for  a  few  moments, 
and  then  some  spring  mixed  with  it,  returned  to  the  elevator  and 
reinspected  as  No.  2  spring  wheat,  thereby  increasing  its  value 
about  $600.  Those  in  control  of  the  market,  naturally,  objected  to 
this,  as  it  would  compel  them  to  buy  a  much  larger  quantity  of 
wheat  than  they  had  anticipated,  and  strong  pressure  was  brought 
upon  the  Directors  of  the  Board  of  Trade  to  interpret  the  rules  so 
that  this  mixing  of  grain  might  be  stopped.  On  July  30  the  ware- 
housemen declined  to  issue  "straight"  receipts  for  the  so-called 
No.  2  spring  composed  of  90  per  cent  red  winter  and  about  10  per 
cent  spring  wheat,  and  the  receipts  for  the  mixture  had  written 
across  their  face  in  gold  red  letters  "special  bin."  Robert  Warren 
&  Company  tendered  one  of  these  "special  bin  receipts"  to  P.  D. 
Armour,  which  he  declined,  and  the  case  was  taken  before  the 
Board  of  Directors.  There  was  a  lengthy  discussion,  and  by  a  bare 
majority  it  was  decided  that  the  "special  bin"  receipts  could  not  be 
tendered  as  regular.  This  decision  created  much  ill-feeling.  It  was 
charged  that  the  bulls  had  captured  the  Directorate,  and  such  men 
as  Asa  Dow,  Jack  Sturges,  S.  H.  McCrea  and  A.  M.  Wright  gave 
heated  interviews  to  the  papers  on  both  sides  of  the  question. 
McGeogh  was  at  the  head  of  the  Milwaukee  corner,  and  was  inter- 
ested in  the  Chicago  deal.  The  Board  of  Trade  had  a  rule  that 
warehouses  should  not  admit  grain  mixed  in  the  city  for  the  pur- 
pose of  raising  it  from  a  lower  to  a  higher  grade,  unless  stored  in  a 
separate  bin  and  a  receipt  issued  specifically  stating  that  it  was 


[1878]  OF  THE  CITY  OF  CHICAGO  563 

so  stored,  such  receipts  not  to  be  deliverable  on  contracts,  except 
by  special  agreement.  It  was  under  this  rule  that  the  "special  bin" 
receipts  were  issued.  It  was  argued  by  the  shorts,  however,  firstly, 
that  this  wheat  had  not  been  raised  from  a  lower  to  a  higher  grade, 
but  the  reverse ;  and,  secondly,  that  having  been  inspected  by  the 
state  as  No.  2  spring,  the  warehousemen  had  no  choice  but  to 
accept  it  as  such  and  store  it  as  regular,  and  to  this  the  warehouse- 
men were  forced  to  yield.  The  July  option  went  up  to  2^/2  cents 
on  the  30th,  and  all  other  grains  were  higher.  There  were  numer- 
ous attempts  to  get  mixed  wheat  graded  as  No.  2  spring,  and  appeal 
was  taken  on  five  canal  boat  loads,  but  the  appeal  was  decided  by 
the  Appeals  Committee  of  the  State  Inspection  Department  in 
favor  of  the  bulls,  the  report  saying  that :  "The  committee  having 
carefully  examined  the  grain  decide  that  the  grade  should  be  No.  2 
red  winter  wheat,  except  the  wheat  on  top  in  the  hatches,  which 
is  new  No.  2  spring  wheat,  and  it  is  understood  by  this  committee 
and  the  inspection  department  that  it  may  be  separated  when 
unloaded,  and  inspected  out  as  above,  being  careful  to  take  out  all 
that  is  in  any  manner  mixed,  and  any  mixture  graded  as  new  No.  2 
spring  wheat."  This  decision,  together  with  the  ruling  of  the 
Board  of  Directors,  ended  the  hopes  of  the  bears  and  the  corner 
was  carried  through  successfully.  At  Milwaukee  there  were  scenes 
approaching  violence  on  'Change,  and  the  price  was  run  up  to  $1.30. 
In  Chicago,  P.  D.  Armour,  with  George  C.  Eldredge  as  his  first 
assistant,  manipulated  the  deal  and  the  price  was  held  at  $1.08,  until 
news  came  from  Milwaukee  and  the  price  was  forced  to  $1.10.  J.  H. 
Drake,  a  New  York  operator,  was  reported  to  have  been  the  heaviest 
operator  on  the  short  side  of  the  market.  Chicago  millers,  who 
were  practically  out  of  wheat,  held  ofif  until  the  expiration  of  the 
corner,  with  the  hope  that  the  usual  break  in  prices  would  follow. 
Armour  held  all  the  spring  wheat  in  the  market,  however,  and,  in 
order  to  keep  their  mills  running,  millers  were  obliged  to  call  on 
him.  They  were  forced  to  pay  as  high  as  $1.08,  which  was  prac- 
tically the  same  as  the  New  York  price.  This  contest  between  the 
bulls  and  bears  was  one  of  the  most  interesting  the  Board  had 
known.  The  shorts  labored  with  Commissioner  Bogue  and  Chief 
Grain  Inspector  Reynolds  to  issue  an  order  in  their  favor,  while 
the  longs  were  equally  insistent  that  the  Board  of  Trade  rule  above 
quoted  be  enforced.  Commissioner  W.  M.  Smith  was  sent  for  and 
upon  his  arrival  in  Chicago  the  commission  decided  not  to  take 
sides,  but  announced  that  a  "mixed"  grade  would  be  created  later. 
These  decisions  angered  the  bears  and  they  charged  that  railroads, 
elevators.  Inspection  Department,  wealthy  operators  and  Board 
of  Trade  officials  had  joined  in  a  conspiracy  to  rob  them.  Some  of 
the  boldest  pronounced  the  whole  deal  tainted  with  bribery  and 
corruption.  The  corner  was  a  "first  page"  sensation  in  the  Chicago 
papers  and  the  following  pen  picture  of  P.  D.  Armour  is  worth 


564  HISTORY  OF  THE  BOARD  OF  TRADE  [1878] 

preserving:  "Phil  Armour,  the  head  center  of  the  bull  clique,  made 
his  appearance  on  the  floor  about  his  usual  time,  and  took  up  a 
position  near  the  provisions  crowd.  He  is  one  of  the  most  imper- 
turbable of  operators,  and,  as  he  surveyed  the  scene  around  the 
wheat  pit,  his  face  showed  no  more  interest  than  the  stolid  coun- 
tenance of  a  first-class  poker  player  over  a  big  jack  pot,  and  well 
he  might.  He  and  his  friends,  both  here  and  in  Milwaukee,  held  all 
the  winning  cards,  and  knew  to  a  point  how  the  game  would  termi- 
nate. Armour  once  in  a  while  took  a  turn  through  the  provision 
crowd,  and  then  returned  to  his  coign  of  vantage,  and,  planting  him- 
self on  a  chair,  watched  the  victims  of  the  corner."  Of  the  Mil- 
waukee corner  it  was  said  that  the  profits  would  reach  $250,000, 
of  which  McGeogh's  share  was  stated  at  $100,000.  It  was  said  to 
be  the  most  successful  corner  ever  run  in  the  Northwest.  On 
August  6  the  Arbitration  Committee  fixed  the  settlement  price  of 
July  wheat  at  $1.07.  From  150,000  to  200,000  bushels  were  defaulted 
in  Chicago,  and  84,000  bushels  in  Milwaukee.  The  heaviest  losers 
here  were  Lyon,  Lester  &  Company,  Robert  Warren  & 
Company,  Culver  &  Company,  J.  H.  Baker  Company.  It 
was  thought  that  there  would  be  a  continuation  of  the 
deal  through  August,  but  during  this  month  a  severe  epidemic 
of  yellow  fever  swept  the  South,  particularly  along  the  Mississippi 
River.  This  had  a  depressing  effect,  and  grain  receipts  were  very 
heavy ;  in  fact,  grain  accumulated  so  rapidly  under  the  large  receipts 
and  the  holding  off  by  shippers  for  lower  freight  rates,  that  the 
warehousemen  opened  up  old  warehouses,  and  corn  was  stored  in 
the  Danville  and  City  elevators.  By  the  end  of  August  it  was 
reported  that  some  elevators  were  fully  two  days  behind  in  the 
issuance  of  receipts,  owing  to  the  great  rush  of  business.  This 
condition  lasted  well  into  the  fall,  and  in  October  it  was  stated 
that  there  had  not  been  a  European  order  for  No.  2  spring  wheat 
for  several  weeks,  winter  wheat  being  preferred.  The  early  October 
markets  were  depressed  by  the  failure  in  Scotland  of  the  City  of 
Glasgow  Bank,  with  liabilities  of  $50,000,000.  This  bank  had  125 
branches,  and  many  industrial  failures  followed  its  suspension.  By 
the  middle  of  October  spot  No.  2  spring  wheat  reached  77  cents, 
the  lowest  price  that  had  been  known  for  six  years.  Other  cereals 
were  low,  corn  being  quoted  at  33%  cents  and  oats  at  18  cents  on 
October  16.  The  problem  of  what  to  do  with  wheat  became  more 
acute  as  the  month  advanced,  and  by  the  31st  it  was  said  that  the 
average  price  of  wheat  of  all  grades  was  71  cents,  making  the  price 
to  the  farmer  about  50  cents.  It  was  not  until  the  middle  of 
November  that  the  markets  took  an  upturn  all  along  the  line,  and 
this  was  accentuated  a  week  later  by  the  outbreak  of  war  between 
Great  Britain  and  Afghanistan.  In  December  began  the  great 
buying  movement  of  which  Keene,  the  New  York  speculator,  was 
the  head.    He  believed  that  wheat  was  destined  to  go  much  higher, 


[1878]  OF  THE  CITY  OF  CHICAGO  565 

and  he  bought  largely  with  the  intention  of  holding.  It  was  said 
that  the  clique  had  not  less  than  $5,000,000  with  which  to  begin 
operations.  This  movement  stimulated  all  markets,  and  was  the 
chief  feature  of  trading  during  the  first  half  of  1879. 

The  bucket-shop  was  gaining  a  foothold  in  Chicago,  and  several 
mentions  of  this  nefarious  industry  were  made  during  the  year. 
The  evil  had  not  grown  to  such  an  extent,  however,  that  any  action 
was  taken,  or  perhaps  thought  of,  by  the  Board  of  Trade.  Chicago 
papers  of  January  27  contained  the  announcement  of  the  "Free 
Board  of  Trade."  The  announcement  ran :  "Every  man  his  own 
broker;  middlemen  abolished  and  each  operator  to  conduct  his  own 
transactions  on  accurate  information.  Established  by  W.  C.  Lin- 
coln, on  the  model  of  the  New  York  'Public  Produce  Exchange.' 
Hall  just  behind  Board  of  Trade  in  old  Toledo  building.  Tele- 
graphic connections  with  Board  of  Trade.  No  deal  over  5,000 
bushels.  Commission  ^^  of  1  per  cent."  In  February  the  "Tribune" 
said :  "It  is  reported  that  'Bucket  Shops,'  as  they  are  called  in 
New  York,  are  about  to  be  opened  in  Milwaukee  and  St.  Louis. 
Of  course  the  proprietors  of  these  establishments  think  that  no 
family  is  complete  without  one."  In  March  it  was  stated  that  the 
Free  Board  of  Trade,  which  was  dubbed  "The  Pool  Box  Board," 
had  increased  its  commission  to  34  of  1  pcr  cent  with  1  cent  margins. 
W.  C.  Lincoln  was  given  as  the  manager,  and  Clem  Periolat,  Billie 
Clapp,  Dan  Loring  and  Lawrence  and  Martin  were  mentioned  as 
among  the  owners.  It  was  stated  that  the  concern  had  been  losing 
money.  The  fact  that  there  were  few  other  mentions  of  the  "Bucket 
Shops"  during  the  year  is  proof  that  they  were  not  viewed  with 
particular  alarm. 

One  major  accomplishment  of  the  year  was  the  establishment 
of  provision  inspection  on  a  much  better  and  more  reliable  basis. 
The  movement  for  this  began  early  in  the  year  and,  on  January  16, 
the  Directors  referred  the  question  of  new  regulations  to  the  Com- 
mittee on  Inspection  of  Provisions ;  and  there  soon  developed  a 
strong  agitation  for  the  registration  of  provision  receipts  in  the 
same  manner  provided  for  grain  receipts.  By  action,  taken  in  1877, 
summer  packed  pork  had  been  regularized  to  an  extent.  This  was 
not  pleasing  to  the  entire  trade,  and  in  February  there  developed 
a  movement  to  again  limit  regular  pork  to  that  packed  during  the 
four  winter  months.  In  March  the  committee  to  draft  new  rules 
for  the  provision  trade  reported  a  system  similar  to  that  used  in 
the  produce  market.  This  was  considered  at  a  meeting  of  the 
Board  and  all  the  amendments  approved  except  the  section  to 
make  summer  regular  that  year.  The  amendments  provided  for 
the  appointment  of  a  committee  of  five  on  provision  inspection,  who 
should  exercise  supervision  and  act  as  referee  in  case  of  complaint 
against  inspection.  Also  for  the  appointment  of  a  chief  inspector 
who  should  appoint  assistants  to  be  confirmed  by  the  committee. 


<^ 


S66  HISTORY  OF  THE  BOARD  OF  TRADE  [1878] 

It  was  also  provided  that  the  Board  of  Directors  should  appoint 
a  registrar  of  provisions.  All  deliveries  of  beef  or  hog  product  in 
store,  in  the  absence  of  special  agreement,  to  be  by  the  delivery  of 
registered  warehouse  receipts,  issued  from  such  warehouses  or 
places  only  as  shall  have  been  declared  regular  under  the  rules  of 
the  Board.  Deliveries  to  be  accompanied  by  certificate  of  inspec- 
tion. In  April,  C.  H.  S.  Mixer  was  appointed  as  the  first  chief 
inspector  and  registrar  of  provisions.  These  amendments  were 
later  adopted  almost  unanimously.  In  the  meantime  the  men  inter- 
ested in  the  flour  trade  also  met  and  asked  that  a  grade  for  flour 
be  established,  and  a  plan  adopted  by  which  flour,  chiefly  that 
intended  for  export,  be  officially  graded.  The  Board  seemed  to  be 
in  the  frame  of  mind  for  amendments  and  a  petition  was  circulated 
for  the  repeal  of  the  rule  for  the  prevention  of  corners.  This  was 
referred  to  the  Directors,  and  in  the  latter  part  of  March  an  amend- 
ment was  proposed  the  practical  eiTect  of  which  would  have  been 
the  abrogation  of  the  anti-corner  rule. 

This  proposed  amendment  created  a  vast  amount  of  discussion, 
but  when  put  to  a  vote  in  April  it  was  rejected.  Again  in  June 
there  was  further  agitation  for  the  repeal  of  the  rule  against  corners 
and  again  in  July  the  proposition  was  defeated  by  ballot.  In  Octo- 
ber the  Directors  took  action  looking  toward  the  suppression  of 
trading  in  puts  and  calls.  They  also  announced  their  intention  of 
enforcing  the  rule  against  dealing  in  futures  before  9  :30  a.  m.  and 
after  3:30  p.  m.  In  December  by  a  vote  of  551  to  111  a  new  com- 
mission scale  was  adopted.  The  new  rates  were,  for  selling,  per 
bushel :  Carload  lots,  wheat,  corn,  rye  and  barley,  1  cent ;  carload 
lots,  oats  (in  store),  J^  cent;  canal  boat  loads,  of  grain,  J/2  cent;  car 
lots  barley,  on  track  or  delivered  l^X  cents;  car  lots  wheat,  corn, 
oats  and  rye,  on  track  or  on  board  cars,  1  cent ;  seeds,  any  quan- 
tity, 2  per  cent;  dressed  hogs,  car  lots,  Ij^  per  cent;  dressed  hogs, 
less  than  car  lots,  not  to  exceed  2j/2  per  cent ;  bran,  shorts,  millfeed 
and  meal,  per  car,  in  bulk,  $5 ;  broom  corn,  J4  cent  per  bushel. 

A  penalty  was  provided  for  overcharging  or  undercharging, 
allowing  a  drawback  or  rebate,  or  in  any  way  evading  the  spirit 
or  intent  of  the  rule. 

In  the  courts  the  Board  of  Trade  was  engaged  in  a  running  fight 
throughout  the  year  with  the  indomitable  Jack  Sturges.  The  per- 
sistent struggle  which  he  had  made  to  prevent  his  expulsion  has 
already  been  told.  In  January,  1878,  following  a  decision  of  the 
Supreme  Court  sustaining  the  Board,  the  formal  announcement  of 
the  expulsion  of  W.  N.  Sturges  was  made.  By  the  end  of  the  month, 
however,  a  petition  for  his  reinstatement  was  circulated  on  'Change 
and  received  a  large  number  of  signatures.  As  a  remonstrance  to 
this  petition  a  meeting  of  Sturges'  creditors  was  held  in  the 
Directors'  room,  and  the  committee  presented  a  lengthy  report, 
which  was  adopted,  objecting  to  his  reinstatement.     Sturges  imme- 


[1878]  OF  THE  CITY  OF  CHICAGO  567 

diately  replied,  giving  his  side  of  the  case,  and  placing  the  blame 
of  his  failure  upon  others.  In  May,  Mr.  Sturges  filed  a  petition 
for  a  writ  of  mandamus  to  compel  the  Directors  to  restore  him,  and 
cited  in  his  own  behalf  that  the  petition  for  his  reinstatement  had 
been  signed  by  750  members.  At  a  hearing,  in  June,  Sturges  secured 
the  writ  prayed  for,  the  court  saying  that  the  Board  of  Trade  had 
the  right  to  discipline,  but  in  this  case  had  acted  without  due  delib- 
eration and  in  an  irregular  manner.  The  Board  immediately  filed 
a  motion  for  a  new  trial.  This  was  heard  later  in  June  and  over- 
ruled by  the  Court.  The  Board  served  notice  of  an  appeal,  but 
Sturges  secured  an  injunction  restraining  the  Board  from  depriv- 
ing him  of  the  rights  of  membership,  and  he  also  sued  the  Board 
for  $200,000  damages.  Having  secured  the  injunction  he  appeared 
on  'Change,  where  he  was  warmly  welcomed  by  those  friendly  to 
him.  The  next  move  was  on  the  part  of  the  Directors,  and,  in 
August,  they  secured  an  order  of  the  court  dissolving  the  injunc- 
tion, and  Sturges  was  again  out  of  the  Board.  His  reply  was  the 
immediate  securing  of  a  writ  of  supersedeas  from  Judge  Dickey, 
which  reinstated  him  as  a  member  of  the  Board  pending  the  appeal. 
It  was  reported  at  that  time  that  Sturges  had  spent  not  less  than 
$50,000  for  attorneys'  fees  in  his  single-handed  fight  for  reinstate- 
ment on  the  Board  of  Trade.  Later  in  the  year  Sturges  again 
showed  his  litigious  spirit  by  bringing  suit  against  Munger,  Wheeler 
&  Company  for  overcharges  at  their  elevator  after  1872.  He  also 
brought  a  similar  suit  against  Armour,  Dole  &  Company.  These 
suits  were  based  upon  the  failure  of  the  warehouses  to  comply  with 
the  law  of  1872,  which  was  later  declared  constitutional,  and  Mr. 
Sturges  sued  for  the  difference  between  the  rates  allowed  by  law 
and  those  charged  by  the  warehouses.  It  was  predicted  that  no 
less  than  fifty  similar  suits  would  be  brought.  Other  litigation 
during  the  year  in  which  the  Board  was  interested  was  the  case  of 
Bailey,  a  grain  buyer  at  Baileyville,  Illinois,  versus  Bensley,  in 
which  the  rules  of  the  Board  of  Trade  were  upheld.  Bailey  claimed 
that  the  receipts  issued  upon  the  storing  of  his  grain  were  his 
property,  and  that  when  he  directed  certain  grain  held  until  he 
ordered  its  sale  it  was  their  duty  to  retain  the  identical  warehouse 
receipts  issued  for  that  grain.  Bensley  maintained  that  the  grain 
lost  its  identity  and  that  it  was  his  business  only  to  have  on  hand 
receipts  in  sufificient  quantity  to  represent  the  grain  in  his  hands 
unsold.  The  stand  taken  by  Bensley  was  sustained  by  the  court. 
The  great  occasion  of  the  year  was  when  President  Rutherford 
B.  Hayes  paid  a  visit  to  the  Exchange  on  September  13.  He  was 
waited  on  and  escorted  to  the  Board  of  Trade  by  a  committee  of 
ex-Presidents,  consisting  of  George  M.  How,  George  Armour,  C.  E. 
Cidver,  John  L.  Hancock,  Hiram  Wheeler,  W.  M.  Egan  and  J.  W. 
Preston.  There  were  at  least  3,000  people  crowded  into  the  hall  and 
President  N.  K.  Fairbank  introduced  President  Hayes,  who  made  a 


568  HISTORY  OF  THE  BOARD  OF  TRADE  [1878] 

bri^  but  important  speech,  dwelling  chiefly  upon  the  act  for  the  re- 
sumption of  specie  payments  and  advising  that  no  further  legislation 
be  attempted  until  the  law,  which  was  to  go  into  effect  January  1, 
1879,  had  been  given  a  fair  trial.  General  Myers,  the  head  of  the 
United  States  Weather  Bureau,  was  in  the  Presidential  party  and 
spoke  briefly,  saying  that  the  first  authorized  prediction  relative 
to  the  weather  in  the  United  States  was  made  at  Chicago  in  1870. 
In  December,  1878,  the  first  Fat  Stock  Show  ever  held  on  this  con- 
tinent opened  its  doors  at  the  Exposition  Building  in  Chicago, 
under  the  direction  of  the  State  Board  of  Agriculture,  and  this 
served  to  add  to  the  prestige  of  Chicago  as  a  live  stock  market. 

In  December,  a  strike  of  not  over  two  hundred  men  at  the  stock 
yards  completely  tied  up  the  Chicago  Packing  Provision  Company 
and  the  Murphey  and  Higgins  plants.  While  this  strike  was  of 
short  duration,  it  crippled  the  industry  seriously  for  a  time,  throw- 
ing several  thousand  men  out  of  employment.  As  has  been  stated, 
the  feature  of  the  December  market  was  the  opening  of  the  Keene 
wheat  deal.  This  restricted  local  speculation,  as  the  operators  did 
not  wish  to  put  out  a  line  of  shorts,  neither  were  they  inclined  to 
follow  the  lead  of  the  Keene  party.  Perhaps  the  history  of  the 
year  might  well  be  closed  with  a  few  verses  from  a  poem  on  "The 
Wheat  Deal,"  published  in  the  "Tribune"  of  December  7: 

JIM  KEENE'S  SONG  OF  THE  WHEAT. 
I. 

With  mind  distracted  and  worn, 

With  eyelids  heavy  and  red, 
Jim  Keene  lay  in  canopied  state, 

Rolling  and  tossing  in  bed. 
Reporters,  and  brokers,  and  bears. 

Shunning  nor  wishing  to  meet, 
An  groaning  in  awful  nightmares, 

He  sang  this  "Song  of  the  Wheat." 

II. 

Wheat  Wheat!  Wheatl 

I  wish  I'd  stood  aloof, 
And  Wheat!  Wheat!  Wheat! 

Till  it's  piled  up  to  the  roof. 
It's  O!  to  be  a  tramp, 

And  round  free  lunches  lurk. 
Where  cornering  wheat  and  samp 

Is  called  unchristian  work. 

III. 

Wheat  Wheat!  Wheat! 

Till  in  it  I  fairly  swim. 
Wheat  Wheat!  Wheat! 

The  D — 1  take  Rumsey  and  Jim. 
Number  one,  two  and  three — 

Number  three,  two  and  one, 
Till  over  five  millions  I've  bought, 

And  they  tell  me  I've  only  begun. 


[1878]  OF  THE  CITY  OF  CHICAGO  569 

IV. 

With  mind  distracted  and  worn, 

With  eyelids  heavy  and  red, 
Jim  Keene  lay  in  canopied  state. 

Rolling  and  tossing  in  bed. 
Checks!  Checks!  Checks! 

On  every  bank  in  the  street. 
And  still  with  a  voice  of  dolorous  pitch, 

Would  that  its  tonos  could  reach  the  rich, 
Hutch,  and  Dow,  and  Kent,  and  sich. 

He  sang  this  Song  of  the  Wheat. 

The  produce  trade  of  1878  was  unusually  active,  the  volume  of 
receipts  and  shipments  being  far  greater  than  in  any  former  year. 
For  the  first  time  Chicago  passed — and  left  far  behind — the  mark 
of  100,000,000  bushels,  which  had  hitherto  seemed  to  be  the  limit 
to  its  cereal-receiving  ability,  as  it  was  long  thought  to  be  the  limit 
of  British  deficiency  in  wheat  and  flour.  Chicago  handled  a  larger 
number  of  hogs  than  had  been  killed  in  any  one  year  in  the  whole 
West  up  to  a  very  recent  date.  Trade  in  lumber,  seeds  and  other 
articles  made  a  big  stride  forward.  Indeed  Chicago  gained,  and 
largely  gained,  in  almost  everything  on  the  list. 

The  trade  in  hog  products  was  relatively  steady  and  less  active, 
the  speculative  branch  of  the  trade  exhibiting  a  further  decline,  and 
the  purchases  on  'Change  for  shipment  were  smaller  than  in  former 
years.  Early  in  the  year  there  was  a  good  demand  at  fair  prices  for 
shipment  to  consumers,  and  this  continued  till  after  the  end  of  the 
regular  packing  season.  In  May  prices  declined  heavily,  touching 
$7.50  on  pork  and  6^  cents  on  lard,  and  about  4%  cents  on  loose 
short  ribs.  Stocks  were  accumulating  rapidly  under  continued 
large  receipts  of  hogs,  and  it  became  evident  that  there  would  be 
an  unexampled  summer  production,  which  made  the  leading  packers 
oiifer  stufif  at  very  low  prices  for  future  delivery  to  stimulate  con- 
sumption. From  this  point  there  was  a  reaction,  the  market  advanc- 
ing in  August  to  $11  on  pork,  $7.80  on  lard  and  $6.85  on  short  ribs. 
Prices  again  declined,  partly  because  the  yellow  fever  stopped  trade 
in  the  South,  and  then  ruled  steadier  into  December,  when  there 
was  a  temporary  flurry  caused  by  the  strike  at  the  packing  houses. 
The  market  again  turned  down,  pork  dropping  steadily  10  cents 
per  day  for  several  days  in  the  last  half  of  the  month. 

The  wheat  market  was  active  nearly  all  through  the  year,  both 
speculatively  and  in  the  way  of  forwarding  from  the  producer  to 
the  consumer.  Chicago  had  handled  more  wheat  than  in  any  pre- 
vious year  of  its  history,  even  exceeding  1874,  when  receipts  aggre- 
gated 29,764,622  bushels.  Receipts  in  1878  were  29,713,577  bushels, 
against  14,164,515  bushels  in  1877;  and  the  shipments  24,211,739 
bushels,  against  14,909,160  bushels  in  1877,  the  increase  being 
largely  due  to  an  unusual  influx  of  winter  wheat. 

The  course  of  the  market  was  more  uniform,  prices  fluctuating 
less  widely,  while  they  also  averaged  lower  than  in  any  previous 


570  HISTORY  OF  THE  BOARD  OF  TRADE  [1878] 

year  since  the  panic  of  1873.  It  was  said  that  wheat  never  sold  so 
low  in  this  market  as  in  1878,  but  it  sold  at  55@58  cents  in  1861  and 
very  much  lower  some  years  before.  Prices,  however,  ruled  very 
low  and  this  in  spite  of  the  fact  that  there  was  a  big  war  cloud 
early,  and  a  smaller  one  in  the  autumn,  while  speculation  kept 
the  market  for  No.  2  above  a  shipping  basis  during  a  consider- 
able part  of  the  year.  There  was  a  big  foreign  demand,  but  at  low 
prices. 

The  crop  of  1877  was  a  large  one,  but  it  was  preceded  by  one 
below  the  average,  and  stocks  had  been  worked  down  to  an  unusu- 
ally low  point  all  over  the  civilized  world,  when  the  new  wheat 
of  1877  came  on  the  market.  Hence  there  were  a  good  many  holes 
to  be  filled  before  the  trade  had  attained  a  normal  condition,  and 
the  demand  all  through  the  winter  was  unusually  good,  the  Russian 
supply  having  been  also  interfered  with  by  the  war  in  the  Old 
World.  The  Eastern  question  was  far  from  being  settled  at  the 
opening  of  the  calendar  year,  and  many  people  were  afraid  that  all 
Europe  would  be  in  a  blaze  in  the  spring.  This  induced  a  large 
foreign  demand  early,  and  prices  were  sustained  by  this  fact  and 
by  low  freights,  which  enabled  the  property  to  be  laid  down  cheaply 
on  the  seaboard.  There  were  also  some  fears  for  the  safety  of  the 
coming  crop  of  winter  wheat,  the  winter  having  been  an  open  one, 
with  cold  weather  in  March,  but  increasing  prospects  of  peace 
retarded  the  forward  movement.  A  prominent  firm  undertook  to 
corner  the  market  in  March,  but  concluded  to  retire,  and  closed 
up  the  deal  by  the  25th,  making  a  fair  profit.  In  April  there  was 
a  big  speculative  demand  when  it  was  rumored  that  trouble  would 
probably  ensue  between  Great  Britain  and  Russia.  The  news 
that  England  had  called  out  her  reserves  caused  an  advance 
to  $1.14  on  the  27th  of  April,  which  was  the  top  point  of  the 
year. 

The  market  declined  after  that  date  and  tended  downwards 
during  the  remainder  of  the  year,  except  during  a  few  special  spurts 
of  speculative  confidence,  which  were  of  short  duration,  though  a 
great  deal  of  capital  was  under  wheat  on  several  occasions. 

The  wires  were  laid,  in  April,  for  another  corner  in  May,  but 
the  deal  was  run  on  the  March  tactics.  The  cornering  party  became 
satisfied  about  the  middle  of  the  month  that  it  would  not  be  wise 
to  "continue  to  the  bitter  end,"  and  discomfited  a  great  many  who 
had  proposed  to  take  advantage  of  a  squeeze  at  the  close  of  the 
month.  On  Memorial  Day  (the  30th)  the  party  controlling  the  deal 
ran  the  market  up  from  $1.06  to  $1.10  and  adroitly  stepped  out. 
The  next  morning  the  deal  fell  all  to  pieces,  the  market  declining 
from  $1.06  to  98  cents,  and  leaving  about  300,000  bushels  on  the 
hands  of  men  who  had  expected  to  sell  it  at  a  big  profit.  The  mar- 
ket was  weakened  in  the  latter  part  of  this  month  by  immense 
receipts,  2,524  carloads   and  43,400  bushels   of  all   kinds   of  grain 


[1878]  OF  THE  CITY  OF  CHICAGO  571 

being  inspected  into  store  Monday,  the  27th.  These  results  caused 
exporters  to  hold  off  and  they  took  very  little  during  the  last  twenty 
days  of  May. 

The  next  month  the  foundation  was  laid  for  the  big  event  of 
the  year  in  the  speculative  departments  of  the  wheat  market — the 
Armour  corner  of  July — already  described.  About  three  local  firms 
commenced  buying  in  June,  both  here  and  in  Milwaukee.  It  was 
believed  that  a  great  deal  of  the  wheat  was  bought  for  export,  and 
that  large  purchases  were  made  by  the  same  parties  in  the  winter- 
wheat  districts.  About  the  22nd  of  July  the  Chicago  shorts  first 
began  to  see  that  they  were  hopelessly  cornered,  and  from  that  time 
till  the  date  of  the  solar  eclipse  (the  29th)  the  excitement  grew 
apace.  The  rules  of  the  Board  of  Trade  for  the  prevention  of  cor- 
ners were  of  use  in  preventing  prices  from  being  rushed  up  to  a 
cut-throat  point.  The  market  reached  $1.10  on  the  last  day,  and 
the  settling  price  was  established  at  $1.08,  at  which  figure  the  longs 
made  a  big  profit. 

The  corner  was  helped  by  the  July  blight  on  the  spring  wheat 
crop,  which  was  nearly  destroyed  in  some  sections  by  the  extremely 
hot  weather.  This  made  holders  unwilling  to  send  in  what  little 
they  held,  some  of  them  fearing  they  might  want  the  seed. 

After  July  the  market  declined  heavily.  The  signing  of  the 
treaty  of  peace  at  Berlin,  and  the  prospect  of  an  abundant  yield  of 
winter  wheat,  destroyed  confidence  in  the  future  of  prices,  and  the 
shorts  sold  the  market  down  with  a  vengeance,  forcing  it  to  89 
cents  on  the  27th  of  August,  though  the  wheat  sold  (No.  2  spring) 
came  in  very  slowly.  The  farmers  in  the  spring  wheat  regions 
saw  a  partial  failure  all  around  them,  and  did  not  readily  believe 
the  cry  of  a  big  winter  wheat  crop.  Hence  they  were  unwilling 
to  sell  at  the  low  prices  then  current,  while  the  winter  wheat  poured 
into  all  interior  receiving  points  in  unusual  volume,  and  gave  Chi- 
cago her  first  experience  in  handling  winter  wheat  on  a  large  scale. 
Then  ensued  the  well-known  "mixing"  excitement,  some  short 
sellers  seeking  to  fill  their  contracts  with  winter  wheat  spoiled  for 
milling  purposes  by  mixing  with  the  other.  The  winter  wheat  was 
taken  very  freely  for  shipment,  to  the  neglect  of  spring,  and  when 
the  movement  in  that  began  to  slacken,  shippers  confined  them- 
selves to  the  lower  grades  of  spring,  leaving  the  No.  2  to  be  piled 
up  in  store,  and  carried  against  contracts.  The  No.  3  sold  10@14 
cents  per  bushel  below  the  No.  2,  while  the  actual  difference  in  value 
for  milling  purposes  was  understood  to  be  not  more  than  5@6  cents. 
At  the  close  of  navigation  there  were  3,411,371  bushels  of  the  No.  2 
in  store  in  Chicago  (Milwaukee  had  903,858  bushels),  scarcely 
250,000  bushels  of  that  grade  having  been  shipped  out  during  the 
two  months  preceding,  and  that  mostly  in  the  latter  part  of  Novem- 
ber. The  stock  increased  rapidly  in  December  under  continued 
large  receipts,  with  a  small  shipping  movement,  and  at  the  close 


572  HISTORY  OF  THE  BOARD  OF  TRADE  [1878) 

of  the  year  Chicago  elevators  held  more  than  five  and  a  half  million 
bushels  of  wheat,  most  of  which  was  No.  2  spring. 

The  movement  of  corn  was  unprecedently  large,  exceeding  even 
that  of  1876,  which  was  much  greater  than  any  in  the  previous  his- 
tory of  the  trade.  The  receipts  of  1878  were  63,651,518  bushels, 
against  47,915,728  bushels  in  1877;  and  the  shipments  were  59,944,- 
200  bushels,  against  46,361,901  bushels  the  previous  year.  The 
course  of  the  market  was  more  steady  than  usual- — much  of  the  time 
steadily  downward — the  range  and  the  average  of  prices  being  alike 
low. 

During  the  first  three  months  of  the  year  the  trading  in  futures 
was  chiefly  for  May  delivery.  There  was  a  very  large  demand  for 
that  month  at  current  quotations.  This  demand  was  increased  by  a 
hardening  in  rail  freights  in  the  latter  part  of  the  winter,  which 
checked  land  shipment  and  enabled  lake  carriers  to  effect  some 
improvement  in  rates  at  the  opening  of  navigation. 

In  the  summer  the  foreign  and  European  demand  was  steadily 
good,  European  buyers  found  that  there  was  no  danger  of  being 
overwhelmed  by  Danubian  corn,  which  some  had  feared  would 
be  the  case  when  peace  was  made.  On  the  contrary,  they  discov- 
ered that  they  must  look  across  the  Atlantic  for  nearly  their  whole 
supply,  and  so  their  orders  came  thick  and  fast  to  Chicago.  All 
through  May,  June  and  July  and  the  first  half  of  August  the  large 
arrivals  of  corn  were  taken  so  eagerly  by  shippers  that  in  each  of 
these  months  cash  corn  commanded  a  premium  over  futures. 
After  the  middle  of  August,  the  shipping  demand  slackened  mate- 
rially, as  it  began  to  be  understood  that  the  growing  crop  would 
give  a  magnificent  yield,  and  buyers  held  back  for  lower  prices. 
Stocks  then  accumulated  very  rapidly,  running  up  to  4,000,000' 
bushels  in  September,  with  a  corresponding  decline  in  quota- 
tions. 

In  November,  a  threatened  raise  in  rail  freights  produced  a  bet- 
ter shipping  demand  for  corn  to  put  in  transit  for  the  East,  and 
there  was  some  inquiry  for  loading  vessels  to  lie  in  the  harbor  dur- 
ing winter.  It  was  wished  to  secure  the  old  grain,  the  keeping 
qualities  of  which  could  be  depended  upon,  before  it  became  mixed 
with  arrivals  from  the  new  crop  of  1878. 

Meantime  the  new  corn  began  to  arrive  very  freely  and  in 
unusually  good  condition,  and  speculative  buyers  shrank  back  in 
fear  of  being  overwhelmed  by  it  during  the  winter.  The  result  was 
a  drop  to  lower  prices  than  had  been  experienced  since  the  break 
following  the  panic  of  1873,  and  dipping  far  down  towards  the 
bottom  figures  of  1861,  when  mixed  corn  sold  in  this  market  (Sep- 
tember) at  19  cents. 

The  movement  of  oats  through  the  city  exhibited  a  big  increase. 
The  receipts  were  18,839,297  bushels,  against  13,506,773  bushels  in 
1877,    and    the    shipments    16,464,513    bushels,    against    12,497,612 


[1878]  OF  THE  CITY  OF  CHICAGO  ^"^^ ^ 

bushels  the  previous  year.  The  money  realized  from  the  sale  was, 
however,  less,  even  when  reckoned  on  a  gold  basis.  The  market 
also  ruled  much  steadier.  The  range  on  No.  2  mixed  was  only 
about  93/2  cents,  and  the  highest  price  of  the  year  was  much  below 
the  average  price  of  1877.  The  oat  crop  of  1877  was  probably  the 
best,  both  in  quantity  and  quality,  ever  raised  in  the  United  States 
up  to  that  time.  Many  of  them  weighed  34@35  pounds  to  the  meas- 
ured bushel,  which  made  them  very  attractive  to  European  buyers, 
and  they  took  hold  of  them  freely,  while  the  low  prices  stimulated 
an  enormous  domestic  consumption.  The  demand  was  so  good  that 
there  was  no  accumulation  at  any  time,  though  holders  marketed 
them  so  freely  that  an  unusually  large  yield  was  about  all  forwarded 
before  August.  The  oats  were  consumed  as  fast  as  sold.  The  new 
crop  was  very  large,  in  bushels,  but  the  weight  showed  a  consider- 
able falling  off,  the  average  being  3iy2@o2  pounds.  The  course  of 
the  market  was  steady,  as  stated  above.  The  forward  movement 
of  the  preceding  winter  was  a  free  one,  as  continued  undercutting 
by  the  railroad  invited  shippers  to  operate.  Later  freights  ruled 
low  and  shippers  made  fair  profits  on  a  large  trade.  There  was  not, 
however,  much  speculation  in  oats  during  the. year.  Indeed,  there 
had  been  little,  with  the  exception  of  the  Indiana  spurt  in  1874, 
since  the  oat  deal  was  demoralized  by  the  Chandler  corner  of  July, 
1872.  For  this  reason  there  were  few  fluctuations,  except  those 
incident  to  the  excitement  of  war,  and  that  was  powerless  to  elevate 
prices  in  the  early  part  of  the  year  in  the  face  of  a  large  supply. 
The  market  touched  27}i  cents  in  April,  273^  cents  in  July,  when 
it  sympathized  with  wheat,  and  declined  to  18  cents  in  October, 
reacting  to  21  cents  in  November,  and  ranging  about  19^@20  cents 
in  the  last  month  of  the  year. 

The  market  for  rye  was  reasonably  steady,  but  very  low,  owing 
to  receipts  which  were  fully  500,000  bushels  more  than  wanted  by 
the  trade.  The  volume  handled  exhibited  a  further  marked  increase. 
The  receipts  were  2,490,615  bushels  and  the  shipments  2,025,654 
bushels,  against  1,728,865  bushels  received,  and  1,553,375  bushels 
shipped  in  1877.  The  old  crop  was  pretty  well  cleaned  up  by  the 
last  of  June,  and  new  confidence  was  exhibited  in  the  article  on  that 
account,  though  a  large  yield  was  expected.  Trading  in  the  new 
rye  opened  in  July  at  about  46,  and  some  135,000  bushels  were  sold 
for  future  delivery.  The  succeeding  hot  weather  blighted  the  crop 
in  places  and  threw  it  back  two  or  three  weeks,  so  that  arrivals  were 
later  than  usual.  This  caused  an  advance  to  60  cents  here,  and 
large  speculative  transactions  at  corresponding  figures  in  New 
York.  Receipts  of  rye  continued,  however,  in  such  volume  as  to 
cause  another  decline,  the  market  going  down  to  41^^  cents  in 
October,  as  above  noted.  The  break  attracted  buyers  afresh,  and 
there  was  a  liberal  shipping  movement,  rye  going  out  freely  by 
rail  at  about  443^2  cents  after  the  close  of  navigation.     A  great  deal 


574  HISTORY  OF  THE  BOARD  OF  TRADE  [1878] 

of  rye  went  to  Europe,  but  only  three  cargoes  were  taken  by  Canada, 
which  was  much  less  than  usual. 

The  barley  market  was  not  subject  to  the  violent  fluctuations 
witnessed  in  some  former  years,  though  the  range  of  prices  was 
greater  than  in  1877  or  in  1876.  The  excitement  was,  however, 
confined  to  the  two  months  of  July  and  August,  outside  of  which 
the  range  was  comparatively  small.  The  receipts  were  5,754,059 
bushels  and  the  shipments  3,520,983  bushels,  against  4,990,379 
bushels  received  and  4,213,656  bushels  shipped  in  1877.  The  volume 
handled  was  greater  than  in  1872,  when  the  receipts  were  5,251,750 
bushels,  the  greatest  quantity  recorded  for  any  former  calendar 
year. 

The  market  opened  low,  being  depressed  by  the  fact  of  large 
stocks  here  and  at  other  points,  though  the  quantity  in  this  city 
at  the  close  of  1877  was  not  so  great  as  a  year  previous.  There 
was  but  a  limited  demand  for  graded  barley,  even  at  the  low  price 
of  44@58  cents,  which  was  the  range  of  the  first  three  months.  In 
April  the  market  for  No.  2  declined  to  41 J4  cents,  and  then  the 
speculative  element  took  hold,  being  encouraged  to  invest  by  reports 
that  a  diminished  acreage  had  been  sown.  There  was,  however, 
no  excitement  during  the  next  three  months,  the  market  ruling 
relatively  steady.  In  July  the  excessively  high  temperature  incited 
fears  that  the  yield  on  the  smaller  breadth  sown  would  be  still 
further  reduced  by  unfavorable  harvest  weather.  This  developed 
a  large  speculative  movement  in  the  new  crop,  and  the  market  ran 
up  to  $1,203/2  in  August  for  September  delivery  by  the  rush  of  the 
"shorts"  to  fill  contracts.  The  "fancy"  figures  ruling  in  the  West 
induced  some  of  the  eastern  malsters  and  brewers  to  send  to  Ger- 
many for  supplies,  and  considerable  quantities  were  imported  from 
that  country  at  $1.39@1.40  per  bushel  delivered  from  the  ship  in 
New  York  harbor.  Canada  barley  also  advanced  to  a  rather  high 
figure  in  the  eastern  markets,  a  good  deal  going  into  New  York 
state.  This  fact,  of  a  good  demand  by  eastern  men,  caused  local 
malsters  to  invest  to  a  rather  large  extent,  and  then  began  the 
downward  movement  in  quotations.  Barley  was  sent  forward 
very  freely  by  growers,  and  all  the  more  freely  as  it  was  the  only 
grain  that  commanded  anything  like  "fair"  prices  as  gauged  by  the 
market  range  of  previous  years.  Buyers  kept  on  taking  it  till  the 
case  seemed  hopeless,  the  market  declining  in  spite  of  the  efiforts 
of  the  longs  to  stop  it.  Later  the  consumptive  demand  was  chiefly 
of  the  hand-to-mouth  character. 

There  was  a  continued  and  material  growth  in  the  live  stock 
trade.  In  comparison  with  1877,  the  figures  show  a  very  consider- 
able increase  in  the  receipts  of  cattle,  hogs,  sheep  and  horses,  while 
the  aggregate  arrivals  were  larger  by  2,365,322  head  than  for  any 
previous  year  in  the  history  of  the  trade.  The  increase  in  numbers 
was  sufficiently  marked  to  more  than  offset  the  general — and  in 


[1878]  OF  THE  CITY  OF  CHICAGO  575 

i> 

the  case  of  cattle  and  hogs  severe — decline  in  prices,  the  value  of 
all  the  live  stock  received  at  the  Union  Stock  Yards  being  $106,- 
101,879,  or  more  than  $9,000,000  in  excess  of  1877. 

The  course  of  prices  for  live  cattle  during  the  greater  part  of 
the  season  was  downward.  The  year  opened  at  $3.50@5.50  for  com- 
mon to  fancy  grades  and  closed  at  $2.50@5  for  the  same  descriptions. 
The  average  decline,  however,  was  not  so  great  as  the  above  figures 
would  indicate,  being  from  50@65  cents  per  100  pounds.  There  were 
more  poor  cattle  and  also  a  larger  percentage  of  extra  grades  than 
for  the  previous  season,  and  of  course  a  correspondingly  smaller 
proportion  of  medium  to  good  qualities.  For  the  former  class  there 
was  an  almost  continuously  good  export  demand,  and  values  were 
subjected  to  few  and  but  slight  fluctuations.  It  was  believed  that 
the  foreign  European  demand  made  a  difference  in  the  price  of 
choice  and  extra  beeves  of  at  least  $1  per  100  pounds.  The  receipts 
showed  an  increase  of  49,917  head,  amounting  to  1,083,068,  against 
1,033,151  for  1877.  The  number  had  been  equaled  but  once  before. 
That  was  in  1876,  when  the  receipts  reached  1,096,745  head.  Of  the 
year's  increase  about  one-third  must  be  credited  to  what  was  known 
as  "western  cattle."  The  increase  in  the  arrivals  of  that  class  was 
some  10,000  head,  but  in  quality  they  were  slightly  inferior  to  those 
offered  during  the  previous  season.  The  reverse  was  true  of  Texas 
cattle,  the  receipts  showing  a  decline,  while  the  quality  was  much 
improved. 

Hogs. — The  increase  in  receipts  of  live  hogs  was  large  beyond 
all  precedent.  The  figures  were  for  1878,  6,339,654,  and  for  1877, 
4,025,970,  a  difference  of  2,313,684.  The  total  shipments  of  live  hogs 
were  1,266,906,  an  increase  over  1877  of  315,685.  The  year  opened 
on  a  weak  and  declining  market,  and,  excepting  a  comparatively 
brief  period  during  the  summer,  that  was  the  condition  throughout 
the  year.  The  first  week  in  January,  prices  stood  at  $4@4.35,  with 
$4.15  an  average.  From  that  time  until  the  latter  part  of  May  the 
course  of  prices  was  uninterruptedly  downward.  The  last  week  in 
May  found  the  market  at  $3@3. 40,  with  $3.15  an  average — a  decline 
of  just  $1  per  100  pounds.  From  the  beginning  of  June  till  the  close 
of  August  the  market  gradually  worked  upward,  until  $4.15@4.75 
was  reached.  Then  the  downward  tide  again  set  in,  and  it  continued 
to  the  end  of  the  year,  $2.65@2.95  being  the  closing  figures.  The 
average  weight  for  the  year  was  246  pounds. 

It  was  during  these  years  that  the  export  trade  in  cattle  and 
meats  began  to  be  developed.  The  first  direct  shipments  of  fresh 
meats  from  Chicago  to  Great  Britain  were  made  in  1874  in  a  small 
way.  In  1875  the  shipments  were  considerable,  but  this  branch 
of  the  trade  was  still  in  an  experimental  stage.  By  1876  it  had 
been  proved  that  these  shipments  could  be  made  with  profit  and 
the  business  increased  largely.  Only  the  choicest  beeves  were 
shipped,  and  these  were  transported  in  vessels  provided  with  special 


576  /  HISTORY  OF  THE  BOARD  OF  TRADE  [1878] 

equipment  consisting  of  refrigerators  forty  feet  long,  twenty-eight 
feet  wide  and  nine  feet  high,  in  which  the  carcasses  were  placed.  At 
one  side  was  an  ice  box  containing  forty  tons  of  ice.  A  blower,  run 
by  a  steam  engine,  directed  a  current  of  cold  air  from  the  ice  box 
to  the  meats.  After  landing  in  Liverpool  the  meats  were  taken  to 
London  in  special  cars,  each  quarter  being  wrapped  in  cotton  to 
prevent  dirt.  In  this  way  they  were  delivered  in  excellent  condi- 
tion. Still,  the  dressed  beef  trade  of  1875  was  largely  domestic 
trade,  three  establishments  with  a  capacity  of  3,500  head  per  week, 
shipping  to  the  river  towns  of  New  York  and  the  manufacturing 
districts  of  New  England  during  the  winter  months.  In  1876  the 
beef  exports  were  19,990,895  pounds  and  in  1877  they  had  increased 
to  86,132,730  pounds,  in  addition  to  which  17,200  head  of  live  cattle 
were  exported  and  nearly  two  million  pounds  of  mutton.  The  for- 
eign trade  of  Chicago  packers  was  considerably  more  in  1878, 
although  in  the  early  months  of  the  year  the  business  was  greatly 
handicapped  by  the  general  fear  of  contagion,  which  led  the  British 
government  to  issue  the  first  of  the  decrees  against  the  importation 
of  American  cattle  and  meats,  which  so  injured  the  trade  during 
later  years.  Under  this  decree  foreign  animals  were  to  be  landed 
only  at  a  special  part  of  the  port,  to  be  under  the  regulation  of  the 
Commissioner  of  Customs  and  not  to  be  removed  from  the  wharf 
alive.  It  was  believed  in  Chicago,  however,  that  these  restrictions 
would  not  injure  the  trade  as  a  whole,  for  it  was  argued  that  meat 
prices  would  be  enhanced,  thus  stimulating  the  shipments  of  fresh 
meats.  Prior  to  1878  only  the  choicest  beeves  had  been  exported, 
but  in  this  year  the  experiment  was  made  of  shipping  range  cattle 
from  Colorado  and  Texas,  but  the  results  were  not  considered  sat- 
isfactory. 

Seeds. — The  increased  receipts  of  flaxseed  made  up  all  of  the 
10  per  cent  gain  in  seeds  made  over  the  year  preceding,  the  flaxseed 
receipts  being  85,627,370  pounds  and  that  of  other  seeds  being 
48,333,521.  Nearly  3,000,000  pounds  of  flaxseed  were  exported 
direct  from  Chicago  to  Europe.  During  the  fore  part  of  the  year 
prices  on  flaxseed  ruled  much  lower  than  during  the  same  months 
in  1877,  averaging  30  cents  per  bushel  less.  The  new  crop  aver- 
aged 3  cents  lower  than  in  1877,  although  the  lowest  price  for  1878, 
$1.15@1.20,  was  recorded  in  December.  The  high  price  was  $1.45, 
paid  during  March  and  April.  Shipments  of  flaxseed  amounted  to 
54,902,310  pounds.  The  shipments  of  other  seed  amounted  to 
40,538,960  pounds.  Timothy  ranged  from  $1.40  in  March  to  $1.01 
in  November,  and  clover  from  $5.05  in  March  to  $3.50  in  December. 

Flour.— Mention  is  made  in  the  Secretary's  report  for  the  first 
time  that  "considerable  quantities  of  flour  have  been  received  in 
sacks."  The  establishment  of  grades  had  not  produced  marked 
results,  although  much  was  expected  from  the  fixing  of  the  grades 
of  "extra"  and  "superfine"  to  correspond  with  those  of  the  New 


[1879]  OF  THE  CITY  OF  CHICAGO  577 

York  market.  City  manufacture  of  flour  increased  and  for  the  first 
time  there  was  noted  the  great  increase  in  the  manufacture  of  oat- 
meal and  cornmeal,  largely  for  export.  Receipts  of  flour  were 
3,030,562  barrels  and  shipments  2,779,640  barrels.  The  price  range 
on  medium  to  choice  white  winter  flour  was  from  $6@7  per  barrel 
in  January  to  $4.25@5  during  the  latter  months  of  the  year. 

Lumber. — Receipts  of  lumber  were  the  largest  of  any  year  up 
to  that  time  with  the  exception  of  1872,  and  shingle  receipts  were 
the  largest  known.  The  general  lumber  trade  was  satisfactory, 
and  conducted  with  a  profit.  Receipts  were  1,180,586,150  feet  and 
shipments  626,735,118  feet. 

Transportation. — Freight  rates  ruled  low  in  1878,  and  were  not 
subject  to  wide  fluctuations.  Attempts  to  maintain  rates  were  not 
entirely  successful,  and  Chicago  complained  of  discriminations, 
which  injured  its  trade.  The  Secretary  laid  much  stress  upon  the 
necessity  of  improving  water  routes  and  the  extension  of  the  canal 
directly  west  to  the  Mississippi  River.  All  rail  freights  on  grain, 
per  100  pounds  to  New  York,  ranged  from  40  cents  in  January  to 
20  cents  from  May  to  August.  Lake  and  rail  rates  on  wheat,  per 
bushel  to  New  York,  were  as  low  as  7>4  cents  in  July,  and  as  high 
as  14^  cents  after  the  middle  of  September.  Lake  freights  on 
wheat  per  bushel  touched  1^  cents  in  midsummer,  rising  gradually 
to  6y2  cents  in  November. 

1879  " 

The  great  outstanding  event  of  importance  to  American  busi- 
ness interests  at  the  beginning  of  1879  was  the  resumption  of  specie 
payments.  It  was  an  act  which  had  been  opposed  strongly,  the 
immediate  effect  of  which  was  problematical  and  which  was  feared 
by  many.  The  wisdom  of  placing  the  actual  operation  of  the  law 
far  in  advance  of  its  passage  was  seen  in  the  gradual  adjustment 
of  values  which  had  taken  place.  It  had  been  noted  that,  for  the 
years  prior  to  resumption,  gold  and  currency  had  approached, 
nearer  and  nearer,  in  value,  and  when  the  law  took  effect,  January 
1,  1879,  they  were  so  near  par  that  there  was  practically  no  dis- 
turbance in  financial  or  business  circles.  As  there  had  been  no 
panic  and  no  catastrophe  the  business  world  had  been  inspired  with 
new  confidence,  not  only  in  the  currency,  but  in  itself.  With  this 
firm  basis  America  began  an  era  of  prosperity  which  lasted,  with 
but  minor  checks,  for  the  next  fourteen  years.  The  Chicago  Board 
of  Trade,  as  the  very  heart  and  center  of  the  great  and  growing 
West,  enjoyed  its  full  share  of  this  prosperity,  and  contributed  its 
full  share  to  the  advancement  of  the  times. 

It  was  a  sign  of  the  vitality  of  the  Association  that  the  elec- 
tion of  1879  was  the  signal  for  a  vigorous  contest.  The  regular 
ticket  was  headed  by  Willaim  Dickinson  as  the  candidate  for  Presi- 
dent, while  Asa  Dow  was  the  candidate  of  the  "Reform"  party.    In 


578  HISTORY  OF  THE  BOARD  OF  TRADE  [1879] 

a  small  way  there  was  all  the  excitement  of  a  political  campaign, 
with  heated  arguments,  contributions  to  the  Chicago  papers  and 
circulars  distributed  among  the  members.  The  Reform  party- 
claimed  that  the  aflfairs  of  the  Association  had  been  mismanaged, 
that  there  was  a  ring  in  control,  that  the  assets  were  to  some  extent 
paper  assets  and  that  Secretary  Randolph  was  too  dictatorial  and 
should  be  deposed.  In  reality  the  fight  centered  on  the  continuance 
of  Mr.  Randolph  in  office,  and  all  his  enemies  rallied  to  the  Dow 
standard.  There  was  also  a  warm  contest  between  H.  W.  Rogers 
and  R.  W.  Dunham  for  the  Second  Vice-Presidency.  At  the  elec- 
tion, out  of  a  membership  of  1,832,  1,113  votes  were  polled,  this  being 
the  largest  vote  the  Board  had  ever  known.  The  vote  for  President 
was :  Dow,  647,  and  Dickinson,  463 ;  for  Second  Vice-President, 
Rogers,  574;  Dunham,  504.  The  Dow  faction  was  jubilant  and  took 
no  pains  to  conceal  its  joy  over  the  supposed  defeat  of  Randolph. 
A.  C.  Thomas,  T.  T.  Gurney  and  Chas.  Stiles  were  all  proposed  for 
the  Secretaryship.  B.  P.  Hutchinson,  W.  N.  Sturges  and  Chas. 
Stiles  were  among  the  leaders  of  the  Dow  faction.  At  the  annual 
meeting  the  successful  candidate  was  greeted  with  boisterous  cheers 
and  shouts  of  triumph  on  the  part  of  his  supporters.  It  was  found, 
however,  that  the  enemies  of  Mr.  Randolph  had  counted  without 
their  host,  for  while  Dow  was  elected,  the  majority  of  the  Directors 
favored  the  retention  of  Randolph. 

The  report  of  the  Directors  for  the  preceding  year  showed  the 
finances  not  in  as  good  condition  as  in  former  years.  Beginning 
the  year  1878  with  assets  of  $176,903,  the  year  was  closed  with 
assets  of  $173,912.  The  receipts  had  been  $68,788  and  the  expendi- 
tures $71,056.  The  cash  on  hand  was  reduced  to  $440.  The 
Directors  blamed  the  deficit  in  revenue  largely  upon  the  decreased 
payments  for  the  various  forms  of  tickets  of  admission  to  the 
Exchange  rooms,  but  did  not  see  fit  to  raise  the  annual  assessment, 
which  remained  at  $20.  The  necessity  for  economy  was  admitted, 
and  in  line  with  this  a  Committee  on  Retrenchment,  to  be  named 
by  the  President,  was  authorized.  Speaking  of  the  work  of  the 
preceding  year  in  regard  to  changes  of  rules,  the  Directors  said  in 
their  report : 

"In  the  early  part  of  the  past  year  your  Board  of  Directors, 
in  accordance,  as  they  believed,  with  the  general  wish  of  those 
engaged  in  the  provision  trade,  afifected  a  reorganization  of  the 
inspection  of  provisions,  by  consolidating  under  one  head  the  whole 
official  inspection  of  the  immense  amount  of  provisions  handled  in 
this  market ;  and,  later,  established  a  system  for  the  registration 
of  all  warehouse  receipts  for  provisions  delivered  on  contract  by  the 
members  of  this  Association.  The  adoption  of  these  measures  is 
believed  to  have  given  a  high  degree  of  satisfaction  to  all  engaged 
in  buying,  selling  or  advancing  upon  provisions,  imparting  as  they 
do  a  confidence  in  the  paper  representatives  of  provisions  held  in 


[1879]  OF  THE  CITY  OF  CHICAGO  579 

store  that  was  not  attainable  under  the  former  mode  of  conducting 
the  business.  The  system  of  registration,  which  it  was  deemed 
proper  should  be  free  of  charge  to  the  issuers  or  holders  of  ware- 
house receipts,  necessarily  entails  some  expense  on  the  Board,  but 
it  is  believed  this  will  be  cheerfully  borne  by  the  members,  in  view 
of  the  resulting  advantages.  The  fees  for  the  inspection  of  provi- 
sions have  been  voluntarily  reduced  by  the  chief  inspector,  the 
reduction  probably  amounting  to  much  more  than  the  expense 
incurred  by  the  establishment  of  the  system  of  registration. 

"In  obedience  to  a  general  desire  on  the  part  of  those  engaged 
in  the  flour  trade,  a  system  of  inspecting  flour  by  grade  has  also 
been  established  within  the  past  year,  and  is  now  in  successful 
operation.  While  it  is  probable  that  in  most  instances  dealers  in 
flour  will  still  prefer  the  inspection  by  sample  of  the  bulk  of  the 
flour  sold  in  this  market,  yet  it  is  believed  a  considerable  and  grow- 
ing demand  will  arise  for  inspection  by  grade,  especially  on  lots 
designed  for  export." 

At  the  meeting  of  the  Directors  on  the  14th  of  January,  Charles 
Randolph  was  re-elected  Secretary  and  the  minor  officers  of  the 
Board  were  also  re-elected.  C.  J.  Blair  was  elected  Treasurer.  It 
was  immediately  following  this  meeting  that  agitation  began  for 
the  limiting  of  clerks"  tickets.  It  was  argued  that  the  many  clerks 
overcrowded  'Change  and  that  they  had  taken  to  themselves  all  the 
privileges  of  membership,  trading  in  their  own  and  others'  behalf. 
The  matter  was  brought  before  the  Board  the  latter  part  of  January, 
and  on  the  suggestion  of  Mr.  Bensley  it  was  proposed  to  admit  clerks 
as  messengers,  but  to  prohibit  them  as  traders.  As  finally  enacted 
the  rule  as  to  clerks,  which  went  into  efifect  February  17,  allowed 
each  firm  one  clerk,  to  act  as  messenger,  upon  the  payment  of  an 
annual  fee  of  $10,  and  messengers  were  to  wear  badges  and  not 
to  be  permitted  to  trade.  Two  rooms  were  set  aside  for  settling 
clerks.  The  clerks  held  a  burlesque  indigation  meeting  on  the  day 
of  their  banishment,  but  the  rule  worked  well,  for  many  of  the 
clerks  became  members,  and  the  "Tribune"  of  February  14  said 
that  memberships  had  doubled  in  value  since  the  passage  of  the  rule. 

A  matter  which  engaged  the  attention  of  Board  members,  and 
of  the  entire  business  interests  of  northern  Illinois,  was  the  alleged 
discriminations  by  which,  it  was  charged,  the  railroads  were  trying 
to  put  the  canal  out  of  business.  Numerous  conventions  were  held 
at  various  points,  and  strong,  but  futile,  resolutions  adopted.  The 
Board  took  no  formal  action  on  this  subject,  but  many  of  its  promi- 
nent members  were  participants  in  the  movement. 

In  February,  the  Directors  met  to  discuss  the  admission  of 
Lorin  G.  Pratt,  attorney  for  W.  N.  Sturges,  who  had  applied  for 
membership.  There  was  no  personal  objection  to  Mr.  Pratt,  but 
it  was  urged  that  the  Sturges  litigation  was  pending  before  the 
Supreme  Court  and  that  the  Board's  case  would  be  weakened  by 
the  admission  of  his  attorney.    A  majority  of  the  Membership  Com- 


580  HISTORY  OF  THE  BOARD  OF  TRADE  [1879] 

mittee  reported  adversely  to  Mr.  Pratt  and  this  action  was  approved 
by  the  Directors. 

For  nearly  a  year  there  had  been  desultory  talk  concerning  the 
necessity  for  a  new  building,  and  it  has  been  seen  that  a  motion  to 
remodel  was  voted  down,  with  the  idea  of  a  new  building  in  mind. 
The  project  took  definite  form  in  February,  1879,  however,  when  a 
proposal  was  made  to  the  Board  by  Mr.  W.  L.  Scott,  the  owner 
of  lots  thought  to  be  the  most  available.  He  proposed  the  vacation 
of  LaSalle  street  and  the  widening  of  Pacific  and  Sherman  avenues 
and  the  erection  of  a  building  there.  The  plan  was  considered 
favorably  by  many  members,  the  chief  objections  urged  being  the 
difficulty  of  securing  the  desired  vacation  and  the  long-time  lease 
held  on  the  Chamber  of  Commerce  building.  The  seed  was  sown 
at  this  time,  however,  which  led  to  the  erection  of  the  building 
somewhat  later. 

It  was  not  until  June  that  the  Committee  on  Retrenchment 
made  its  report.  T.  T.  Gurney,  Clinton  Briggs,  J.  H.  Drake,  S.  D. 
Foss  and  W.  H.  Goodenow  were  the  members,  and  they  had 
employed  E.  R.  Wheelock  as  an  expert  accountant  to  examine  the 
books  of  the  Board.  Their  report  recommended  numerous  changes 
in  bookkeeping  and  urged  reductions  in  expenses  amountig  to  $505 
per  month.  Among  these  economies  was  to  be  the  reduction  of  the 
Secretary's  salary,  from  v$500  to  $400  per  month.  The  report  credited 
Mr.  Randolph  with  perfect  honesty  as  to  his  accounts,  but  criticised 
him  severely  for  alleged  discourtesy  to  Mr.  Wheelock  and  for 
saying  that  the  accountant  was  engaged  to  do  the  "dirty  work" 
for  the  committee.  This  was  resented  as  a  reflection  upon  the  com- 
mittee itself,  which  claimed  it  was  but  doing  the  work  for  which 
it  had  been  appointed.  The  committee  found  the  terms  of  the  lease 
of  the  Chamber  of  Commerce  building  to  be  extravagant  and  sug- 
gested that  legal  advice  be  obtained  as  to  its  validity;  it  was  also 
urged  that  the  Board  should  not  pay  the  expense  of  elevator  service, 
and  it  was  recommended  that  future  meetings  of  the  Directors  be 
open  to  members.  This  report  was  referred  to  a  committee  of 
Directors,  who  made  short  work  of  most  of  its  recommendations. 
No  changes  in  bookkeeping  were  advised.  It  was  stated  that  sal- 
aries for  the  year  had  been  fixed  and  could  not  be  taken  up  at  that 
time  and  the  matter  was  referred  to  the  Directors  to  act  upon  when 
the  proper  time  came,  and  closed  sessions  of  the  Board  of  Directors 
were  favored.  The  only  recommendation  of  the  committee  reported 
favorably  was  that  concerning  the  necessity  for  enlarged  quarters 
and  as  to  the  validity  of  the  lease. 

The  inspection  question  was  one  which,  in  those  days,  the 
Board  "had  always  with  it."  In  January  the  statement  was  made 
that  the  number  of  inspection  appeals  was  increasing  to  such  an 
extent  as  to  be  a  detriment  to  trade.  Of  the  1,070  appeals  taken  in 
1878,  two-thirds  were  within  the  last  five  months  of  the  year,  and 


[1879]  OF  THE  CITY  OF  CHICAGO  581 

it  was  urged  that  the  law  regarding  fees  be  changed  so  as  to  dis- 
courage appeals.  In  February  the  House  Warehouse  Committee 
of  the  legislature  had  under  consideration  a  bill  for  the  return  of 
the  inspection  service  to  the  control  of  the  Board  of  Trade.  Repre- 
sentative Mason  had  the  bill  in  charge,  but,  as  formerly,  the  Board 
was  divided,  the  large  shippers  favoring  state  control  and  the  ;  / 
receivers  wishing  control  returned  to  the  Board  of  Trade.  Quite 
naturally,  with  this  division  of  sentiment,  nothing  was  accom-  ' 
plished.  Inspection  fees  were  reduced,  however,  the  new  rates, 
effective  in  February,  lowering  them  as  follows :  Inspection  out 
of  elevators  into  vessels,  from  40  cents  to  30  cents  per  1,000  bushels  ; 
into  cars,  from  30  cents  to  20  cents  per  carload ;  out  of  canal  boats, 
from  40  cents  to  25  cents  per  1,000  bushels.  These  rates  were 
favorable  to  canal  shipments,  and  were,  possibly,  brought  about  by 
the  various  conventions  held  in  behalf  of  the  canal.  A  review  of 
the  inspection  service  made  about  this  time  stated  that  there  were 
ten  "in"  inspection  stations  and  fifteen  for  "out"  inspection.  J.  P. 
Reynolds  was  chief  inspector,  and  the  Appeals  Committee,  con- 
sisting of  P.  W.  Dater,  S.  D.  Foss  and  T.  H.  Seymour,  had  offices 
at  156  Washington  street.  B.  F.  Culver  was  registrar,  employing 
six  clerks,  and  no  fee  was  charged  for  registration.  A  committee 
consisting  of  G.  M.  How,  E.  B.  Baldwin  and  Robert  Warren  was 
appointed  to  go  to  Springfield  to  urge  changes  in  the  law,  but  they 
found  it  useless  to  go  on  account  of  the  sharp  division  of  sentiment 
among  the  members  of  the  Board.  In  April  the  dissatisfaction  with 
the  inspection  service  grew,  and  Mr.  Hayde,  objecting  both  to  the 
action  of  the  inspectors  and  of  the  Appeals  Committee,  shipped  a 
car  of  corn  which  had  arrived  over  the  Illinois  Central  Railroad 
from  Belleflower,  back  to  Springfield  in  order  that  the  legislative 
committees  might  judge  for  themselves.  At  Springfield  the  grain 
was  adjudged  "too  damp  for  No.  2,"  and  the  Chicago  inspection 
sustained.  In  June  there  were  further  bitter  complaints,  and  it 
was  stated  that  the  assistant  inspectors  were  at  variance,  one  being 
for  a  high  standard  and  the  other  for  a  low  standard,  and  that  the 
grade  depended  largely  upon  the  inspector  in  charge  at  the  time, 
thus  demoralizing  the  trade  to  a  certain  extent.  It  was  at  this 
time  that  S.  D.  Foss  announced  his  intention  of  resigning  from  the 
Appeals  Committee,  to  take  efifect  July  1.  In  August  it  was  com- 
plained that  the  standard  set  for  Chicago  was  so  high  that  grain 
was  being  diverted  to  other  points.  The  inspectors  urged  that 
wheat  in  order  to  pass  as  No.  2  must  be  "reasonably  clean."  A 
conference  was  held  between  the  inspectors  and  the  complainants, 
at  which  the  inspectors  held  to  their  position  regarding  dirty  wheat 
and  were  sustained  by  the  Committee  of  Appeals  of  the  Board  of 
Trade.  Nevertheless  complaints  continued,  and  it  was  stated  that 
wheat  graded  as  No.  3  in  Chicago  easily  inspected  No.  2  at  Mil- 
waukee.    In   October  Messrs.   Dater  and   Seymour  also   resigned 


S82  HISTORY  OF  THE  BOARD  OF  TRADE  [1879] 

from  the  Appeals  Committee  and  George  Field,  John  Walker  and 
Chas.  A.  Phelps  formed  the  new  committee.  This  action  followed 
a  lengthy  protest  made  by  the  Inspection  Committee  of  the  Grain 
Receivers'  Association  in  September.  It  was  declared  that  the 
Appeals  Committee  was  composed  entirely  of  buyers  of  grain  and 
that  the  producers  and  the  receivers  were  unrepresented.  The 
appointment  of  two  members  to  represent  these  branches  of  the 
trade  was  asked,  and  it  was  further  stated  that  it  was  wished  that 
the  standard  be  maintained,  not  raised,  and  it  was  suggested  that 
a  visible  sample  of  each  grade  be  displayed  in  the  office  of  the  chief 
inspector.  Speedier  action  was  also  demanded  on  the  part  of  the 
Appeals  Committee.  This  did  not  end  the  inspection  troubles,  how- 
ever, for,  in  October,  there  were  serious  complaints  as  to  the  inspec- 
tion of  barley,  and,  in  December,  it  was  reported  that  out  of  seven- 
teen cars  of  wheat  graded  No.  3,  fourteen  were  reversed  and  graded 
No.  2  by  the  Committee  of  Appeals,  while  the  other  four  cars  were 
forwarded  to  Milwaukee,  where  they  also  passed  inspection  as  No.  2. 

There  were  not  many  important  changes  in  the  rules  of  the 
Association  during  the  year.  In  January,  operators  at  Liverpool 
made  an  effort  for  the  adoption  of  the  cental  system,  and  this  was 
agitated  in  Chicago  during  the  summer,  but,  as  usual,  nothing  came 
of  it.  The  most  important  change  was  relative  to  clerk's  tickets,  as 
already  noted.  In  June  the  Directors  decided  that  it  was  not  the 
province  of  the  Board  to  enforce  trades  between  members  if  made 
inside  other  organizations,  but  street  trades,  made  inside  trading 
hours,  were  enforcible.  This  decision  was  made  in  a  case  arising 
out  of  a  bucket  shop  transaction  and  showed  the  opposition  of  the 
Board  to  these  institutions. 

New  rules  concerning  corners  were  urged  at  this  time,  and  con- 
sideration was  given  the  establishment  of  a  grain  clearing  house. 
In  this  connection  it  is  interesting  to  note  that  the  first  suggestion 
of  a  grain  clearing  house  was  made  by  P.  P.  Oldershaw,  in  Febru- 
ary, 1870.  At  that  time  Mr.  Oldershaw  proposed  a  plan  for  a  grain 
clearing  house  to  clear  and  close  all  time  contracts  in  grain  and 
settle  differences  as  sales  and  purchases  balanced  in  amounts.  This 
was  to  include  sales  or  purchases  made  at  any  time  and  to  cover 
any  portion  of  shorts  or  longs  under  a  series  of  well  thought-out 
rules.  Although  the  plan  proposed  by  Mr.  Oldershaw  was  perfectly 
feasible,  nine  years  had  elapsed  without  its  being  put  into  opera- 
tion, and  at  this  time  nothing  was  done  except  to  discuss  it.  There 
was  much  interest  among  the  provision  dealers  when,  in  August,  a 
vote  was  taken  on  the  proposal  to  permit  the  use  of  iron  bound 
packages  in  the  provision  trade.  This  was  a  contest  of  packers  vs. 
coopers,  and  the  "iron  bound  bucket"  won  by  a  majority  of  twenty. 
In  September  the  rules  concerning  commissions  were  modified  so 
that  special  agreements  might  be  made  under  which  the  commis- 
sion merchant  might  charge  not  less  than  }4  per  cent  for  selling 


i 


[1879]  OF  THE  CITY  OF  CHICAGO  583 

corn  or  oats,  when  no  advances  had  been  made.  Later,  in  October, 
it  was  arranged  that,  as  to  deliveries,  notices  of  readiness  to  deliver 
property  should  be  handed  around  instead  of  the  actual  warehouse 
receipts,  thus  having  the  property  paid  for  at  the  time  of  receiving 
the  warehouse  receipts  and  not  several  hours  later. 

Markets  were  comparatively  quiet  the  first  part  of  the  year, 
although,  in  January,  there  was  a  decided  boom  in  pork.  In  Febru- 
ary, the  renewed  tide  of  speculation  set  in  and  during  the  remainder 
of  the  year  Chicago  was  the  scene  of  the  wildest  and  most  general 
speculation  it  had  ever  known.  During  all  the  winter  months  the 
"Keene  deal"  had  been  the  great  feature  overshadowing  everything 
else  in  the  wheat  market.  It  was  known  that  in  the  previous  Decem- 
ber Keene  and  his  friends  had  bought  large  quantities  of  wheat 
which  they  were  holding  in  Chicago.  What  was  to  be  the  final 
disposition  of  this  wheat  was  the  question  which  puzzled  all  traders. 
On  March  7,  J.  K.  Fisher  &  Company,  brokers  for  Keene,  received 
a  dispatch,  not  in  cipher,  ordering  them  to  sell  the  Keene  holdings 
until  the  market  reached  a  certain  price.  The  firm  carried  out  these 
instructions  and  threw  more  than  2,300,000  bushels  of  wheat  on  the 
market.  Under  such  heavy  selling  the  market  broke  Syi  cents  in 
three  hours.  Wiring  Keene  for  further  instructions  and  notifying 
him  of  the  sales,  Mr.  Fisher  was  surprised  to  receive  a  wire  of 
inquiry  from  Mr.  Keene,  and  later  it  was  learned  that  the  first  dis- 
patch was  bogus  and  had  never  been  sent  by  Keene.  Fisher  upon 
receiving  notice  that  something  was  wrong  and  the  dispatch  unau- 
thorized, quietly,  through  a  few  personal  friends,  bought  back  all 
he  had  sold,  and  was  said  actually  to  have  made  a  considerable  sum 
by  the  mistake,  for  the  market  quickly  reacted.  There  were  a  large 
number  of  small  losers,  however,  and  these  men  claimed  that  the 
whole  transaction  was  a  market  trick  to  which  Keene  was  a  party. 
Keene  protested  that  the  dispatch  was  a  forgery,  repudiated  the 
sale  and  offered  a  reward  of  $25,000  for  the  discovery  of  the  guilty 
party,  and  Mr.  Fisher  asked  the  Directors  to  aid  in  the  detection 
of  the  man  responsible  for  the  forged  telegram.  After  this  sudden 
break  and  partial  recovery  there  was  little  excitement  in  the  wheat 
market  until  the  corner  in  June  wheat  developed.  Perhaps  the 
best  account  of  this  transaction,  covering  the  whole  deal,  was  given 
in  an  article  in  the  Chicago  "Tribune,"  on  July  7,  but  a  few  days 
after  the  corner  was  over.    The  "Tribune"  said  : 

"The  wheat  deal  in  this  city,  which  some  people  think  is  closed, 
and  others  do  not,  is  probably  the  largest  operation  of  the  kind 
ever  witnessed.  There  is  good  reason  to  believe  that  the  June 
deal,  gigantic  in  itself,  was  only  a  continuation  of  the  big  invest- 
ment made  by  James  Keene  in  wheat  the  closing  months  of  last 
year.  There  is  also  little  reason  to  doubt  that  the  operation  has 
attained  a  much  greater  magnitude  than  was  originally  intended  by 
the  great  California  speculator. 


584  HISTORY  OF  THE  BOARD  OF  TRADE  [1879] 

"The  price  of  wheat  ruled  very  low  last  Autumn.  The  fact  of 
a  big  crop  in  the  United  States,  estimated  by  the  Agricultural 
Bureau  at  425,000,000  bushels,  caused  first  holders  to  market  their 
wheat  very  freely,  and  the  big  supplies  pressing  upon  buyers 
encouraged  them  to  insist  on  lower  prices.  They  were  aided  by 
the  speculative  operators  known  as  bears,  many  of  whom  thought 
the  market  here  would  decline  to  about  60  cents  per  bushel,  or  one 
cent  per  pound,  and  hastened  to  make  money  by  selling  short. 
The  result  was  an  almost  continuous  drop  in  prices  till  our  market 
reached  77  cents,  on  October  10.  Then  a  local  combination  took 
hold  of  it.  and  caused  a  reaction  to  81  cents  by  the  close  of  the  month. 
During  this  time  Mr.  Keene  was  studying  the  situation,  with  the 
aid  of  prominent  men  in  New  York,  and  decided  on  making  an 
investment.  He  bought  some  five  to  six  million  bushels  in  this 
market,  mostly  at  80@85  cents,  which  was  the  range  of  prices 
during  November  and  December,  and  is  believed  to  have  intended 
to  carry  it  till  spring,  and  ship  it  at  low  freight  rates  near  the  opening 
of  navigation.  He  practically  owned  or  controlled  all  the  wheat  in 
this  city  during  the  winter,  but  there  was  a  widespread  fear  that 
he  was  'only  playing  with  it,'  and  operators  were  all  the  time  nerv- 
ously looking  for  the  day  when  he  would  unload,  and  leave  the  grain 
to  be  moved  out  by  others  'on  its  merits.'  Still  the  market  ruled 
much  higher  than  was  expected,  and  the  better  prices  induced  large 
shipments  from  the  farm,  while  shippers  Eastward  contented  them- 
selves by  handling  the  relatively  cheap  lower  grades.  The  result 
was  a  glut  of  No.  2  in  our  warehouses,  which  made  many  think 
that  current  quotations  could  not  be  sustained,  and  they  held  aloof 
from  the  deal,  leaving  the  market  a  very  slow  one,  while  Keene  and 
his  agents  maintained  a  profound  silence  in  regard  to  their  acts 
and  intentions.  The  quiet  was  broken  March  7,  by  the  receipt  of 
the  well-remembered  order  (whether  genuine  or  not  is  still  a  dis- 
puted point  with  some)  under  which  Archie  Fisher,  Keene's  broker, 
sold  out  2,300,000  bushels  in  a  few  hours  ;  the  price  for  April  delivery 
declining  from  93  to  863^  cents  during  the  process.  The  wheat  was 
repurchased  by  noon  the  next  day,  which  caused  a  partial  reaction ; 
but  the  market  was  'stupid'  for  a  long  time  afterwards,  as  many 
people  refused  to  believe  that  Keene  continued  to  own  any  large 
quantity  of  wheat,  and  the  great  majority  entertained  grave  doubts 
in  regard  to  the  situation.  It  appears  probable  that  about  this  time 
Keene  formed  the  design  of  much  extending  his  original  program, 
the  popular  mind  being  in  favor  of  selling,  while  reports  from 
Europe  indicated  an  increased  demand  for  our  available  surplus, 
and  it  appeared  probable  that  our  receipts  during  the  spring  months 
would  be  light,  the  stocks  in  farmers'  hands  being  reduced  to  a  low 
point  by  the  unprecedently  active  movement  of  earlier  months. 
The  party  to  whom  it  is  supposed  the  conduct  of  the  deal  was  com- 
mitted, after  the  episode  of  March,  bought  the  astonishing  quantity 
of  11,000,000  bushels,  to  be  delivered  during  May  and  June.  Most 
of  this  was  sold  at  90@95  cents  by  men  who  did  not  own  a  grain  of 
wheat  at  the  time  of  sale,  but  expected  to  be  able  to  buy  it  for  less 
before  the  time  came  to  deliver  the  property.  Our  receipts  were 
not  so  large  as  expected  by  the  shorts,  and  the  market  advanced  as 


[1879]  OF  THE  CITY  OF  CHICAGO  585 

they  tried  to  fill  in.  The  price  touched  $1.00  on  May  22 ;  the  month 
of  June  opened  with  a  market  at  $1.00,  and  closed  at  $1.07.  About 
7,000,000  bushels,  or  two-thirds  of  the  whole,  was  covered  during  the 
last  week  in  the  month  at  $1.04@1.07;  and  some  quarter  of  a  million 
bushels  were  left  undelivered.  The  price  at  which  these  outstanding 
contracts  must  be  settled  will  be  fixed  by  the  Committee  of  Arbitra- 
tion. 

"The  shorts  are  out  collectively  to  the  amount  of  more  than  a 
$1,000,000.  But  it  by  no  means  follows  that  the  other  side  has  made 
so  much  money,  or  will  have  made  any  profit  at  all  by  the  time  they 
are  done  with  it.  The  operating  expenses  are  large,  including 
brokers'  fees,  storage,  insurance  and  telegraphing,  with  interest  on 
the  money  employed.  This  will  absorb  a  large  part  of  the  nominal 
profit ;  and  there  is  large  quantity  of  wheat  yet  on  hand  to  be  sold 
to  the  consumers  at  prices  which  are  at  present  undetermined.  The 
most  recent  news  from  Europe  is  favorable  to  the  holders,  but  there 
is  no  question  that  they  have  run  a  dangerous  risk  in  retaining  the 
property  so  long,  right  up  to  the  forward  edge  of  another  harvest, 
which  might  have  proved  to  them  a  'ragged  edge'  indeed." 

The  Arbitration  Committee  fixed  the  settlement  price  of  June 
wheat  at  $1.05,  but  the  Appeals  committee  named  $1.07  as  the  price 
and  it  was  on  this  basis  that  the  shorts  were  obliged  to  settle. 
Later,  in  the  case  of  W.  T.  Baker  &  Co.  vs.  C.  H.  Taylor  &  Co. 
a  committee  composed  of  George  Field,  Murry  Nelson  and  Judge 
Couch,  made  the  basis  of  settlement,  $1.05,  with  5%  penalty,  making 
the  price  $1.10.  It  was  said  that  this  decision  showed  that  the  Board 
"had  no  intention  to  shield  shorts."  On  July  18,  there  was  a  collapse 
in  the  wheat  market.  In  the  morning  the  price  was  91@94,  in  the 
afternoon  it  was  89^4,  and  on  the  following  day  it  touched  863/2 
cents.  In  September,  there  came  new  confidence  into  the  wheat 
market.  The  European  demand  was  large  and  the  out-break  of 
the  Afghan  war  added  much  strength.  It  was  then  there  began  a 
season  of  speculation  such  as  Chicago  has  rarely  known.  To  under- 
stand this  market  movement  it  is  necessary  to  speak  more  fully  of 
the  then  status  of  the  bucket  shop  in  the  Chicago  trade.  But  a 
year  or  two  before  occurred  the  first  mention  of  the  bucket  shop  in 
Chicago.  As  late  as  1878  it  was  spoken  of  only  as  an  incidental  evil 
and  had  gained  no  strong  foot-hold.  But,  in  1879,  it  suddenly 
blossomed  into  full  flower,  and  was  for  the  time  the  most  popular 
and  largely  patronized  institution  in  Chicago.  Some  attacks  were 
made  upon  individual  bucket  shops,  which  were  alleged  not  to  be 
run  "on  the  square,"  but  there  was  little  objection  as  to  the  legiti- 
macy of  the  bucket  shop  as  an  institution.  On  the  other  hand  it 
was  heralded  by  some  as  a  sort  of  democratized  Board  of  Trade, 
where  the  common  people  could  speculate  without  the  intervention 
of  brokers  and  where  a  large  capital  was  not  necessary  for  the 
making  of  a  fortune.  Excited,  perhaps,  by  the  stories  of  the  big 
deals  and  the  large  profits  on  'Change  and  believing  that  crop  and 


586  HISTORY  OF  THE  BOARD  OF  TRADE  [1879] 

European  conditions  warranted  a  higher  price,  the  general  public 
commenced  a  great  buying  movement.  This  movement  began  in 
the  fore  part  of  September,  and  was  not  an  unmixed  blessing  for 
the  bucket  shops. 

As  has  been  noted  the  bucket  shops  were  usually  on  the  bear 
side  of  the  market,  and  the  continued  advance  caused  severe  losses 
to  many  of  them.  "The  Merchants  Grain  &  Stock  Exchange,"  of  143 
Madison  Street,  was  the  first  of  these  firms  to  go  under,  and  this  was 
followed  by  the  suspension  of  Lumpkin  &  Company,  and,  in  Octo- 
ber, the  bucket  shops  were  hard  hit  and  the  Loring,  Pope  Company, 
and  Doxey's  bucket  shops  suspended.  So  great  was  the  rush  to  buy 
that  the  bucket  shops  curtailed  their  business,  raised  their  commis- 
sions and  refused  many  orders.  Later  in  October  the  "Chicago 
Grain  &  Provision  Exchange"  closed  its  doors  with  liabilities  of 
$10,800,  and  assets  of  $700.  Financial  backing  was  secured,  how- 
ever, and  the  offer  to  settle  at  25  cents  on  the  dollar  was  accepted. 
While  the  course  of  the  wheat  market  was  upward  during  these  fall 
months,  it  was  not  without  its  setbacks.  After  a  steady  climb 
strengthened  by  rumors  of  war  between  England  and  Russia,  so 
that  an  advance  of  4^4  cents  was  made  on  September  18th,  there 
came,  on  the  24th,  a  good  day  for  the  bears,  and  the  market  fell  6 
cents.  This  bear  movement  was  headed  by  what  was  called  the 
"Saratoga  Combination,"  and  was  aided  by  the  failure  of  Eastern 
firms ;  at  Milwaukee  this  bear  movement  amounted  almost  to  a 
panic.  The  bucket  shops  made  a  rich  harvest  on  this  break  and 
the  Loring  shop  was  reported  to  have  cleared  $23,000.  Country 
speculators  were  the  chief  losers,  as  their  margins  vanished  with 
the  sudden  drop.  There  was  a  quick  rally,  however,  and  wheat  went 
up  5  cents  on  the  26th.  So  great  had  this  speculative  frenzy  become, 
and  so  general  was  it  among  all  classes,  not  only  in  Chicago  but 
throughout  the  West,  that  on  September  28,  the  Chicago  Tribune 
dealt  with  the  subject  in  an  editorial  which  gives  a  first  hand  view 
of  the  conditions  then  existing.    The  Tribune  said : 

"In  July  last,  the  great  corner  on  wheat  was  closed  up,  the 
price  holding  as  high  as  $1.05  per  bushel  until  the  settlement  was 
made,  when  it  reached  to  93  cents,  and  still  later  to  87  cents  and  to 
83  cents.  Since  the  first  ten  days  in  September,  the  tendency  of  the 
price  has  been  upward,  and  one  day  last  week  it  touched  $1.08.  At 
the  first  sign  of  advance  the  gambling  began.  In  all  previous  years 
the  excitement  of  this  kind  of  operations  was  confined  to  the  Board 
of  Trade,  that  is,  the  operations  have  been  carried  on  by  members, 
for,  and  on  account  of  outsiders.  But  this  year  has  witnessed  the 
successful  establishment  of  institutions  which  bear  the  euphonious 
and  expressive  title  of  'bucket  shops.'  To  do  business  on  'Change 
an  outsider  has  to  hand  over  his  $100  or  $1,000  to  a  broker,  who, 
for  a  commission,  invests  that  amount  either  in  a  purchase  or  a  sale, 
putting  up  the  money  as  a  margin.  At  the  bucket  shops  no  broker 
is  necessary ;  any  person,  man  or  woman,  boy  or  girl,  white,  black. 


tl879]  OF  THE  CITY  OF  CHICAGO  587 

yellow  or  bronze  can  deal  directly.  That  is,  by  putting  in  $1.00,  or 
$3.00  or  $5.00  or  $50.00,  at  the  rate  of  1  cent  per  bushel,  he  or  she, 
becomes  the  owner  of  the  risk  in  100  or  300,  or  500  or  5,000  bushels 
of  wheat.  If  wheat  advances  1  cent  per  bushel,  the  investor  doubles 
his  stake,  if  the  price  falls,  the  loss  is  proportionate.  As  a  general 
rule,  the  winnings  are  few — so  few  and  exceptional  that  it  may  be 
said  that  99  or  even  a  greater  per  cent  of  the  money  deposited  in 
the  bucket  shops  remains  there.  The  fraud,  cheat  and  swindle  are 
so  transparent  that  it  seems  to  be  a  libel  on  common  intelligence  to 
admit  that  these  establishments  do  an  immense  business  every  day. 
The  most  surprising  thing  is  the  general  character  of  the  customers 
"who  patronize  these  establishments.  First — there  are  the  boys — 
lads  from  12  to  16  years  of  age,  school  boys,  cash  boys  in  retail 
stores,  bootblacks  and  newsboys,  messenger  boys,  boys  of  all  degree 
and  occupations,  who,  singly  or  by  combinations  of  two  or  more, 
can  raise  $1.00  or  $2.00  or  $5.00.  These  rush  to  the  Board  of  Trade 
alley,  where  the  shops  are  in  operation,  and  by  the  hundreds  pour  in 
their  money.  The  occasional  profit  of  3^^  or  JX  or  1  cent  a  bushel, 
serves  to  whet  the  avarice  and  inspire  the  appetite  for  new  ventures. 
Sometimes  these  lads,  also  represent  school  girls  and  sisters,  whose 
small  savings  are  also  sent  to  be  emptied  into  the  bucket  shops. 
Boys  of  larger  growth  and  men,  clerks,  salesmen,  bookkeepers,  men 
in  business,  hackmen,  teamsters,  men  on  salaries,  and  men  employed 
at  day's  work,  stone  cutters,  blacksmiths  and  workmen  of  all  wages 
and  occupations ;  students  and  professors  of  colleges,  reverend 
divines,  dealers  in  theology,  members  of  Christian  Associations, 
members  of  societies  for  the  prevention  of  cruelty  to  animals,  and 
for  the  suppression  of  vice,  gentlemen  who  war  on  saloons  which 
permit  minors  to  play  pool,  and  teachers  of  Sunday  schools,  hard 
drinkers  and  temperate  men,  old  men  and  young  men — as  well  those 
of  all  these  classes  who  live  in  the  cities  and  towns  of  this  state, 
and  of  Indiana,  Wisconsin,  and  Michigan,  and  even  occasionally  an 
Ohio  man,  as  those  who  live  in  Chicago — all,  in  person  or  by  agent, 
purchase  their  500  or  1,000.  or  5,000  or  10,000  bushels,  depositing 
their  margins,  and  confidently  hope  to  have  their  money  back  with 
100,  or  even  500  per  cent  profit. 

"These  unfortunately  do  not  include  the  most  daring  and  reck- 
less of  all  gamblers  who  do  business  at  the  bucket  shops.  There 
is  not  an  average  woman  who  thinks  her  means  are  more  scant 
than  she  would  like  to  have  them,  who  does  not  in  her  heart  despise 
the  caution,  or,  as  she  calls  it,  the  cowardice,  of  the  average  man, 
nor  is  there  one  who  does  not  insist  to  herself  that,  if  she  were  only 
a  man,  instead  of  being  cruelly  condemned  to  he  a  woman,  she  would 
go  on  that  Board  of  Trade  and  just  sweep  the  Board,  making  enough 
money  in  thirty  days  to  render  herself  and  husband  and  family  inde- 
pendent for  life.  Confidence  in  her  own  courage  and  the  belief  that 
men  fail  because  they  won't  succeed,  make  her  chafe  under  the 
conventionalities  which  exclude  her  from  the  money-making  walks 
of  life,  and  the  bucket  shop  opens  to  her  imagination  the  longed-for 
opportunity  to  show  what  she  might  do  if  she  had  only  had  a  chance. 
To  these  shops,  women  come  with  their  tens,  twenties,  and  fifties, 
and  boldly  stake  their  money.     They  are  not  women  of  desperate 


588  HISTORY  OF  THE  BOARD  OF  TRADE  [1879] 

or  questionable  condition,  they  are  the  wives  and  mothers  of  families 
in  comfortable  financial  condition.  To  a  woman  of  this  kind,  the 
bucket  shop,  which  holds  out  a  chance  to  win  200  per  cent  in  24 
hours,  overcomes  all  other  considerations,  and  she  boldly  stakes 
her  money,  boldly  elbows  her  way  through  the  crowds,  pays  her 
cash,  and  with  her  ticket  under  her  pillow,  dreams  of  the  time  when 
with  plethoric  purse  she  will  be  recognized  as  a  first-class  customer 
in  every  dry  goods  house  in  Chicago.  The  ventures  of  these  women 
are  not  confined  to  the  bucket  shops ;  they  venture  their  money, 
through  brokers  on  'Change,  in  deals  not  only  in  grain,  but  in  pork 
and  lard,  and  everything  else  in  which  any  other  person  has  at  any 
time  ever  made  money  by  bold,  daring,  reckless  and  furious  gam- 
bling. But,  while  this  is  the  case  to  some  extent,  the  great  part  of 
these  dealings  by  women  is  in  the  bucket  shops ;  there  the  deal  is 
direct,  and  the  result  is  soon  known,  and,  as  all  these  operations  are 
made  unknown  to  husbands,  the  facilities  for  secrecy  are  much 
greater  than  in  the  higher  grade  of  business.  A  lady  can  pay  her 
$50  at  the  bucket  shop  and  take  her  ticket  in  any  name  she  may 
select,  or  even  without  any  name  at  all,  and  in  case  of  loss,  no  one 
is  the  wiser.  In  case  of  gain  she  can,  as  she  invariably  will  do, 
reinvest  both  stake  and  gain,  and  lose  all  at  one  fell  swoop." 

Yellow  fever  was  again  epidemic  at  Memphis  and  other  south- 
ern points  during  the  summer,  and  this  had  some  effect  upon  the 
market  and  appealed  strongly  to  the  sympathies  and  generosity  of 
the  Board  of  Trade.  In  September  a  committee  consisting  of  J.  W. 
Preston,  S.  H.  Richardson,  and  C.  J.  Gilbert  was  appointed  to  solicit 
funds  for  the  relief  of  yellow  fever  sufiferers.  It  was  hoped  to  raise 
$10,000  in  Chicago  and  the  committee  met  daily  in  the  office  of  the 
secretary.  Throughout  October  the  wheat  market  was  subject 
to  violent  fluctuations,  but  with  a  constantly  upward  tendency.  On 
the  16th,  wheat  touched  $1. 22^/2,  and  it  was  reported  that  the  side- 
walks, alleys,  and  bucket  shops  were  crowded  with  active  and 
excited  traders.  Corn  caught  the  speculative  fever  towards  the 
last  of  October  and  on  the  21st,  touched  49  cents.  Provisions  also 
were  booming,  and  became  too  high  for  shipments.  One  thousand 
barrels  of  pork  were  brought  to  Chicago  from  Cleveland  to  fill 
October  sales.  By  November  the  markets  were  generally  lower, 
and  with  this  bear  movement,  the  craze  of  speculation  abated.  This 
lessening  of  bucket  shop  activities  was  aided  by  the  exposure  of 
their  methods  by  the  Chicago  papers.  Circulars  issued  by  B.  G. 
Martindale  &  Company,  together  with  their  letters  to  victims  were 
printed  and  it  was  pointed  out  that  their  transactions  were  entirely 
bogus  and  that  the  company  was  unknown  on  'Change.  Through- 
out November  the  market  ranged  lower  and  with  little  excitement, 
the  provisions  trade  being  injured  by  a  strike  movement  which  was 
threatened  as  early  as  November  2,  and  which  grew  to  alarming 
proportions  before  the  end  of  the  year.  The  demands  of  the  unions 
were  followed  by  a  lockout  and  the  plants  of  B.  F.  Murphy,  Chicago 


[1879]  OF  THE  CITY  OF  CHICAGO  589 

Packing  &  Provision  Company,  Higgins  &  Company,  Ricker  Pack- 
ing Company,  Armour  &  Company,  Chapin,  Cudahy  Company  were 
affected.  By  December  30,  three  packing  houses  were  reopened  but 
the  strikers  threatened  the  workers  and  the  hog  market  was  dull 
at  $4.50@4.70.  In  December  there  was  a  general  improvement  in 
"the  produce  market,  and  in  the  earlier  part  of  December  there  was 
much  excitement  in  pork.  On  Thursday,  December  4,  mess  pork 
•was  up  75  cents,  on  Friday  the  5th,  there  was  a  rush  to  sell  and  pork 
went  down  95  cents  in  25  minutes.  This  was  the  day  of  the  great 
bear  raid  and  all  markets  declined.  Later  interest  was  developed  in 
January  wheat  and  on  the  25th  it  was  reported  that  $5,000,000  were 
being  sent  to  Chicago  to  pay  for  the  January  wheat  bought  by 
Keene. 

Among  matters  of  importance  to  the  trade  may  be  mentioned 
as  follows :  In  February  the  Senate  of  the  United  States  passed  a 
law  concerning  stock  shipments,  providing  that  there  should  not 
be  more  than  twenty-eight  consecutive  hours  of  travel  without 
seven  hours  unloading  for  rest,  water  and  feed.  It  was  provided 
that  cattle  must  be  fed  by  the  railroads  if  not  done  by  the  owners, 
and  the  railroad  was  given  a  lien  on  cattle  to  cover  feeding  expense. 
In  March  the  Board  was  much  interested  in  municipal  politics,  as 
A.  M.  Wright,  for  many  years  one  of  the  most  prominent  members, 
was  the  republican  candidate  for  mayor.  He  was  defeated,  however, 
by  Carter  Harrison  by  a  majority  of  5,000.  Prior  to  the  opening  of 
navigation  the  vessel  owners  got  together  agreeing  to  stand  for  a 
4  cent  rate.  For  some  time  there  was  a  deadlock  between  the  vessel 
owners  and  the  shippers,  but  this  was  broken  when  one  John  Ash 
agreed  to  carry  80,000  bushels  of  corn  to  Buffalo  for  Armour  & 
Company  for  3  cents  per  bushel.  The  vessel  owners  were  highly 
indignant  and  their  directors  held  a  meeting  in  the  Board  of  Trade 
rooms,  and  tugs  and  trimmers  were  warned  not  to  have  anything 
to  do  with  Ash's  boats. 

It  was  noted  in  August  that  30,000  bushels  of  wheat  were 
shipped  to  points  in  Ohio  and  Indiana,  the  No.  3  or  rejected  grades 
to  be  mixed  with  winter  wheat,  and  sold  as  a  higher  grade.  It  was 
said  that  this  had  grown  to  be  a  regular  "science."  November  was 
made  notable  by  two  events.  Ex-President  U.  S.  Grant  returned 
from  his  triumphal  trip  around  the  world,  and  his  coming  to  Chi- 
cago was  the  signal  for  a  great  civic  and  military  reception.  The 
closing  of  the  Board  of  Trade  in  honor  of  his  coming  was  the  signal 
for  the  closing  of  all  the  other  commercial  and  financial  institutions 
of  the  city.  During  this  month  also  the  second  annual  Fat  Stock 
show  was  held  and  its  success  assured  its  permanency.  In  Decem- 
ber a  ruling  was  made  fixing  24,000  pounds  as  carload  weight, 
instead  of  20,000  lbs.  as  formerly. 

The  produce  trade  of  the  year  was  more  active  than  in  any 
previous  year  in  Chicago's  history;  the  volume  of  receipts  and  ship- 


590  I  HISTORY  OF  THE  BOARD  OF  TRADE  [18791 

ments  aggregated  5  per  cent  more  than  in  1878.  The  tendency  of 
prices  was  to  a  low  level  during  the  first  three  quarters  of  the  year. 
There  was  a  widespread  disposition  to  regard  the  short  side  as  the 
safe  side,  the  principal  check  being  administered  by  the  Keene 
investment  of  the  previous  winter.  Prices  kept  down  till  the  specu- 
lative world  became  slowly  aware  that  Western  Europe  was  start- 
lingly  deficient  in  her  crop  yield,  as  a  consequence  of  unusually  bad 
weather.  There  was  a  revulsion,  and  the  popular  sentiment  was 
so  decided  that  it  sent  prices  up  high  enough  to  make  the  year's 
average  a  slight  improvement  upon  that  of  1878.  The  great  bulk 
of  all  the  hogs  in  the  West  came  to  Chicago  because  of  the  superior 
facilities  for  packing  and  carrying.  During  the  last  four  months 
of  the  year  some  of  the  largest  moneyed  men  were  the  heaviest  losers 
by  the  autumn  boom  in  produce.  They  guessed  wrong,  and  the 
error  involved  a  loss  of  much  cash.  The  most  notable  feature  of 
the  movement  was  the  fact  that  so  many  of  the  big  men  were  on 
the  wrong  side  of  the  deal.  This  was  the  reason  why  there  were 
so  few  failures,  as  the  men  who  lost  money  were  able  to  bear  it, 
but  men  who  had  been  looked  up  to  for  years  as  able  to  dictate  the 
course  of  prices  were  unable  to  do  so. 

The  course  of  the  wheat  market  has  already  been  outlined.  The 
receipts  were  34,106,109  bushels,  against  29,713,577  bushels  the 
previous  year,  and  the  shipments  were  31,006,789  bushels,  against 
24,211,739  bushels  in  1878.  The  crop  of  1878  was  a  large  one,  and 
preceded  by  a  prolific  yield  in  1877  gave  a  large  surplus  at  the  begin- 
ning of  the  year. 

Corn. — The  market  for  corn  exhibited  a  decline,  both  in  quan- 
tity and  price.  The  receipts  were  64,339,321  bushels,  against 
63,651,518  bushels  in  1878,  and  the  shipments  were  61,299,376 
bushels,  against  59,944,200  bushels  the  previous  year.  It  should 
be  remembered,  however,  that  the  movement  of  corn  in  1878  was 
nearly  one-third  larger  than  in  1877,  being  much  the  biggest  year 
up  to  that  time.  With  the  exception  of  that  phenomenal  twelve 
months  no  former  year  compared  with  1879  in  regard  to  quan- 
tities handled,  and  no  recent  one  ruled  so  low  in  the  price  of  the 
article.  Even  the  autumn  advance  in  the  prices  of  all  kinds  of 
produce  failed  to  raise  the  corn  average  to  a  fair  price,  as  gauged 
-by  the  record  of  many  prior  years. 

The  reason  for  the  diminished  movement  of  corn  through 
Chicago  was  to  be  found  by  a  comparison  of  rail  with  lake  freights. 
The  railroad  companies  did  not  discriminate  against  Chicago  so 
severely  as  in  some  former  years,  but  they  carried  grain  eastward 
at  one  time  at  such  low  rates  as  to  beat  the  water  route.  In  May 
corn  was  rushed  from  Chicago  to  New  York  at  10  cents  per  100 
pounds  by  rail,  and  as  it  was  taken  from  interior  points  (Toledo, 
etc.)  at  the  same  rate,  the  result  was  comparatively  light  receipts 
here,  as  there  was  not  at  that  time  any  commercial  boom  to  put  up 


J 


[1879]  OF  THE  CITY  OF  CHICAGO  591 

the  price  in  Chicago  sufficiently  to  pay  the  extra  cost  of  warehous- 
ing and  inspection.  Later  in  the  year  the  railroads  advanced  rates 
to  a  point  which  gave  water  navigation  the  advantage,  notwith- 
standing the  fact  that  lake  freights  were  much  higher  than  in  any 
previous  year  since  the  panic.  Hence  a  great  deal  of  corn  was 
drawn  here  from  the  far  Southwest,  as  in  1878,  and  there  was  not 
much  going  around  on  the  cut-off  lines  from  Iowa  and  Western 
Illinois.  In  November  the  receipts  again  fell  off,  but  for  another 
reason  than  that  noted  above,  the  Grant  visit  helping  moist  weather 
to  keep  back  the  new  crop. 

The  low  prices  ruling  in  March  tempted  one  or  two  prominent 
operators  to  buy  largely  in  the  spring,  and  they  carried  the  deal 
over  from  one  month  to  another  till  autumn  without  finding  a 
chance  to  turn  at  a  profit.  Early  in  the  summer  it  was  generally 
believed  that  there  was  a  brilliant  prospect  for  the  then  coming 
crops,  and  that  made  the  country  sell  very  freely.  The  trade  had 
to  take  the  load  and  carry  it  as  best  it  could. 

The  tide  of  speculation  set  into  the  wheat  market,  and  after- 
wards invaded  corn,  only  because  the  latter  was  thought  to  be  rela- 
tively cheap.  The  market  went  up  to  49  cents,  but  soon  fell  back. 
Indeed,  there  is  reason  to  believe  that  the  advance  not  only  occurred 
sooner  than  looked  for  by  the  clique,  but  that  it  changed  their  plans. 
They  had  intended  to  keep  down  quotations  till  late  in  October, 
believing  that  would  check  receipts,  and  thus  give  them  little  grain 
to  handle  at  the  close  of  the  month.  But  the  corn  came  in  thick 
and  fast.  They  sold  out  nearly  at  the  top,  instead  of  carrying  the 
deal  through ;  so  that  the  October  corner  proved  to  be  only  a  scare. 
Some  of  these  parties  took  hold  again  at  the  resulting  decline,  but 
only  to  lose  the  profit  previously  made.  In  the  early  part  of 
November  there  was  another  flurry,  the  May  premium  vanishing 
under  fears  that  a  good  deal  of  corn  sold  to  arrive  that  month  could 
not  be  brought  in,  as  the  railroad  officials  furnished  the  cars  very 
slowly.  At  one  time  November  was  about  3  cents  above  seller 
December.  But  the  way  in  which  the  new  corn  inspected  No.  2 
on  arrival  caused  the  longs  to  lose  courage,  and  they  relinquished 
their  hold.  May  corn  was  really  active  towards  the  close  of  navi- 
gation, and  it  was  thought  the  foundations  had  been  laid  for  a  big 
deal  in  that  month  in  1880.  The  leading  operators  on  both  sides 
were  of  the  order  of  Titans,  though,  of  course,  many  smaller  ones 
joined  in.  A  great  deal  more  money  was  put  into  cribbed  corn  in 
the  winter  of  1879  than  ever  before,  and  more  would  have  been 
invested  if  lumber  could  have  been  obtained  to  build  new  cribs,  as 
cars  could  not  be  obtained  to  carry  it  to  many  places  where  it  was 
wanted.  The  sales  were  so  large  that  some  operators  thought  there 
would  be  a  block  in  deliveries  in  May,  1880,  especially  as  they 
expected  the  warehouses  would  be  full  of  grain  to  begin  with.  For 
this  reason  June  corn  sold  during  December  at  a  wide  discount 


592  HISTORY  OF  THE  BOARD  OF  TRADE  [18791 

from  May.  The  market  during  the  last  half  of  December  was  tame, 
and  was  chiefly  sustained  by  sympathy  with  wheat ;  it  closed 
weak. 

Oats. — The  volume  of  oats  passing  through  the  city  exhibited 
a  decrease,  but  was  much  larger  than  that  of  any  previous  year, 
except  1873  and  1878.  The  receipts  of  1879  were  16,660,428  bushels, 
against  18,839,297  bushels  in  1878,  and  the  shipments  were  13,514,- 
020  bushels,  against  16,464,513  bushels  the  previous  year.  The 
market  ruled  higher  than  in  1878,  but  lower  than  in  any  other  year 
after  the  panic,  oats  having  been  generally  cheap,  as  compared  with 
other  grain.    The  range  of  prices  was  a  rather  wide  one. 

The  crop  of  1878  was  a  very  large  one,  and  the  receipts  weighed 
down  the  market,  making  it  quite  flat  during  the  winter.  No.  2 
mixed  sold  at  19j/^  cents  at  the  opening  of  the  year,  and  barely  passed 
20  cents  during  January.  The  market  improved  to  25j4  cents  in 
March,  but  fell  back  to  21  cents  in  April.  •  About  this  point  a  Minne- 
apolis party  took  hold  freely,  believing  there  was  "millions  in  it." 
Few  other  people  took  the  same  view,  and  every  little  advance 
brought  out  free  sellers  in  such  numbers  that  he  was  unable  to 
control  the  deal  to  a  successful  issue.  The  market  touched  35  cents 
spot  early  in  June,  and  declined  to  25  cents  in  July,  with  a  rather 
large  accumulation  of  oats  on  hand  to  be  taken  by  the  trade.  The 
grain  was  mostly  shipped  to  New  York  at  a  loss,  and  quotations 
declined  to  21%  cents  in  August,  the  new  crop  turning  out  better 
than  had  been  expected.  The  above  named  excitement  was  the 
only  oasis  in  a  desert  of  dullness  during  the  first  eight  months  of 
the  year.  In  October  the  boom  in  wheat  influenced  oats,  but  not  to 
the  same  extent,  the  advance  in  spot  being  slight  compared  with 
other  small  grains,  and  the  market  dragged  at  that ;  32)4  cents  was 
the  highest  price,  with  little  demand  for  shipment.  There  was, 
however,  more  speculation  for  May  delivery,  and  large  quantities 
were  sold  by  parties  who  had  them  in  the  country  on  cheap  storage 
till  wanted.  The  result  was  that  many  country  warehouses  were 
full  of  oats  the  last  of  the  year,  though  the  stock  in  sight  (not  count- 
ing the  country  points)  was  larger  than  usual.  The  last  two  months 
were  marked  by  a  good  consumptive  demand,  partly  due  to  a 
scarcity  of  hay.  The  market,  during  November,  was  a  steady  one, 
considering  the  fluctuations  in  wheat.  The  entire  range  of  the 
month  was  2^4  cents,  and  much  of  that  was  due  to  flurry  the  last 
two  days,  under  pressure  to  square  up  the  deals  of  the  month  early. 
In  December  there  was  a  good  shipping  demand,  which  put  strictly 
fresh  oats  to  a  decided  premium,  and  the  speculative  part  of  the 
market  afterwards  kept  up  in  sympathy  with  wheat  and  corn,  with 
little  trading  except  for  May. 

Rye. — The  market  for  rye  was  a  steady  one,  compared  with 
the  fluctuations  in  other  grain,  and  also  ruled  low.  The  volume 
handled  showed  a  decrease,  as  did  the  yield.     The  receipts  were 


£1879]  OF  THE  CITY  OF  CHICAGO  593 

2,497,340  bushels,  against  2,490,615  bushels  in  1878,  and  the  ship- 
ments were  2,234,363  bushels,  against  2,025,654  bushels  the  pre- 
vious year. 

There  was  a  good  deal  of  speculation  in  this  article  early  in 
the  year,  the  low  price  of  about  44  cents,  in  January,  inviting  buyers, 
and  it  advanced  to  47^4  cents  in  April,  when  it  weakened  by  heavy 
deliveries.  The  market  reacted  and  advanced  up  to  54  cents  in 
June,  new  rye  selling  in  that  month  at  57  cents  for  September 
delivery.  The  firmer  tone  was  due  to  reports  that  the  crop  would 
be  a  very  short  one,  on  account  of  the  drought,  some  placing  the 
shortage  at  nearly  50  per  cent,  while  the  surplus  from  the  crop  of 
1878  was  pretty  well  exhausted,  most  of  it  having  been  exported 
in  the  spring.  The  prospect  improved  towards  the  time  of  harvest. 
The  first  carload  of  new  rye  arrived  July  14,  and  the  new  crop  came 
forward  so  freely  during  August  that  buyers  held  of?  to  see  how 
low  prices  would  decline.  Exporters  let  it  alone  till  about  the  mid- 
dle of  September,  leaving  the  deal  to  the  local  crowd.  A  few  ship- 
ments were  made  to  New  York  and  netted  a  loss.  In  September  a 
brisk  export  demand  suddenly  sprang  up,  and  about  500,000  bushels 
were  taken  in  about  a  couple  of  weeks,  the  result  being  an  advance 
to  60  cents  before  October  came  in.  The  demand  continued  active 
during  the  whole  of  that  month,  and  it  was  estimated  that  two- 
thirds  of  the  rye  which  came  in  sight  was  picked  up  for  export. 
The  foreign  shipments  were  light  after  November  1.  The  market 
advanced  sharply  in  sympathy  with  wheat,  touching  74  cents  by 
the  close  of  navigation  and  81  cents  in  December. 

Barley. — The  market  for  barley  ruled  tame  and  flat  during  the 
greater  part  of  the  year,  with  no  speculation  in  it,  and  a  lessened 
movement  of  the  article,  the  volume  being  not  far  from  one-sixth 
less.  The  receipts  were  4,936,562  bushels,  against  5,754,059  bushels 
in  1878,  and  the  shipments  were  3.566,401  bushels,  against  3,520,983 
bushels  the  previous  year.  The  absence  of  speculation  made  prices 
rule  very  low. 

The  year  opened  with  a  moderately  large  stock,  good  in  quality, 
but  much  of  it  rather  badly  stained  by  unfavorable  weather  about 
the  time  of  harvest.  There  was  a  poor  demand  for  consumption 
during  the  first  two  or  three  months ;  the  price  of  extra  No.  3  fell 
to  33  cents  in  March,  with  34  cents  in  April.  A  little  later  brewers 
and  maltsters  started  up  and  took  hold  very  freely,  the  low  price 
stimulating  consumption.  Their  demand  rapidly  reduced  stocks 
and  caused  a  reaction  to  the  upper  side  of  50  cents  in  May.  The 
market  averaged  a  little  better  than  50  cents  through  May,  June 
and  July,  prices  gradually  hardening  under  a  better  demand  than 
usual  for  the  medium  grades  of  malt,  which  made  it  probable  that 
the  old  barley  crop  would  be  pretty  well  used  up  by  the  time  the 
new  came  on  the  market.  The  production  of  beer  steadily  increased, 
and  some  maltsters  doubled  their  capacity  without  being  able  to 


594  HISTORY  OF  THE  BOARD  OF  TRADE  [1879] 

keep  a  fair  stock  of  malt  on  hand.  But  they  only  bought  barley 
as  fast  as  they  wanted  to  use  it,  and  the  remarkable  absence  of 
speculation  kept  quotations  down  to  a  low  point  as  compared  with 
other  grain. 

The  receipts  of  live  stock  for  the  year  made  a  grand  total  of 
8,000,197  head,  which  was  an  increase  over  the  arrivals  for  any 
previous  year.  The  trade  for  1879  was  not  only  the  largest  and 
most  important  Chicago  had  ever  had,  but  the  market  during  most 
of  the  year  was  freer  from  fluctuations  than  ever  before  known. 
During  the  year  the  receipts  of  cattle  reached  1,215,732  head,  a 
larger  number  than  ever  before  received,  the  total  for  1876  having 
been  1,096,745.  For  the  increase  Chicago  was  principally  indebted 
to  the  states  beyond  the  Missouri  River,  Kansas,  Nebraska  and 
Colorado  furnishing  many  more  cattle  than  in  any  previous  year. 
Not  only  was  there  a  marked  increase  in  the  volume  of  receipts,  but 
the  quality  also  showed  a  gratifying  improvement.  Prices  were 
the  highest  in  January,  choice  to  extra  grades  then  commanding 
$5@5.50.  Early  in  February  they  declined  to  $4.75@5,  and  further 
along  to  $4.50@5.  The  decline  in  the  upper  grades  during  the  latter 
part  of  the  month  was  due  to  a  severe  break  in  the  Liverpool  and 
London,  markets,  which  resulted  in  heavy  losses  to  exporters,  and 
caused  their  temporary  withdrawal  from  the  market.  During 
March  there  was  a  partial  recovery,  and  prices  were  well  sustained 
until  May,  when  they  eased  off.  In  June  there  was  a  further  decline, 
that  month  closing  at  $4.25(a)4.85  for  choice  to  extra  grades.  The 
year  closed  at  $4.75@5.25. 

Hogs. — The  receipts  of  live  hogs  were  6,448,300.  In  com- 
parison with  any  year  previous  to  1878  there  was  an  increase  of 
more  than  2,000,000  head.  The  year  opened  on  very  low  prices,  viz., 
$2.60@2.90,  but  the  market  soon  began  to  advance,  and  at  the  close 
of  January  stood  at  $3.30@3.85.  During  February  there  was  a 
further  appreciation,  prices  reaching  $3.75@4.40.  In  March  prices 
turned  in  the  other  direction,  and  continued  to  work  downward 
until  $3.30@3.60  was  reached  in  May.  The  market  recovered  a 
little  in  June,  but  in  August  it  dropped  off  to  $3@3.50.  From  the 
beginning  of  September  till  the  5th  of  December  the  course  of 
prices  was  gradually  upward.  The  highest  figures  were  reached 
December  5,  the  quotations  for  that  day  being  $4.50@4.85  for  light 
weights  and  $4.65@5.20  for  heavy.  Within  the  following  two 
weeks  the  market  declined  50@75  cents  per  100  pounds.  A  part 
of  this  decline  was  regained,  the  year  closing  at  $4.30@4.55  for 
light  and  $4.25@4.65  for  heavy  grades.  The  advance  during  Octo- 
ber and  November  grew  out  of  the  fear  that  the  hog  crop  would 
prove  short,  while  the  "break"  in  December  was  due  to  the  strike. 
In  consequence  of  the  labor  troubles  the  trade  during  the  last  three 
weeks  of  the  year  was  almost  at  a  standstill.  The  receipts  for  the 
week  ending  with  December  27  amounted  to  only  38,223,  but  such 


[1879]  OF  THE  CITY  OF  CHICAGO  595 

was  the  demoralized  condition  of  the  packing  business  that  even 
the  small  number  of  hogs  exceeded  the  demand. 

Flour. — Trade  in  flour  continued  to  increase,  though  city  manu- 
facture was  less.  The  demand  for  flour  in  sacks  increased,  fore- 
shadowing the  time  when  the  barrel  would  become  nearly  obsolete 
in  the  retail  trade.  Flour  receipts  were  3,369,958  barrels  and  ship- 
ments 3,090,540  barrels.  The  price  range  on  medium  to  choice 
white  winter  flour  was  $4.25@5  in  January,  $6@6.75  in  June,  $5@ 
5.60  in  August  and  up  to  $6.25@7.25  in  December. 

Seeds. — The  Chicago  market  enjoyed  another  good  year  in  the 
seed  trade,  the  growing  West  supplying  an  increasing  amount, 
especially  of  flaxseed.  Prices  were  more  satisfactory  also,  timothy 
going  from  $1.05@1.10  in  January  to  $2.40@2.60  in  December  and 
clover  having  a  range  of  from  $3.65@6.30  per  bushel.  The  price 
of  choice  clover  in  December  was  $5.50@5.60.  Old  flaxseed  went 
from  $1.25  in  January  to  $1.45  in  June  and  July  and  the  new  crop 
started  at  $1.25,  reached  $1.55  in  November  and  closed  at  $1.48@1.50 
per  bushel.  For  the  first  time  lake  shipments  of  flaxseed  in  bulk 
were  made  and  the  trade  was  of  such  proportions  that  an  inspection 
system  was  contemplated.  The  movement  of  seeds  was  as  follows : 
Receipts,  flaxseed,  119,262,794  pounds;  other  seeds,  50,509,727 
pounds ;  shipments,  flaxseed,  86,204,852  pounds ;  other  seeds,  47,361,- 
744  pounds. 

Lumber. — The  trade  in  lumber  was  the  largest  Chicago  had 
known,  the  receipts  of  1,469,878,991  feet  exceeding  those  of  1872. 
Moreover,  the  trade  was  highly  satisfactory  from  a  business  stand- 
point both  to  manufacturers  and  dealers. 

Hides. — The  trade  in  hides  was  another  branch  of  commerce 
which  showed  a  large  increase  in  1879.  The  receipts  were  56,610,- 
510  pounds,  a  gain  of  over  12,000,000  pounds,  as  compared  with 
1878,  and  the  shipments  61,381,778  pounds,  being  a  gain  of  10,000,- 
000  pounds  over  the  preceding  year.  Prices  started  low,  but 
improved  rapidly  after  midsummer,  closing  fully  50  per  cent  higher 
than  in  1878. 

Transportation. — Lake  freights  (sail)  averaged  higher,  the  low 
point  being  2  cents  in  midseason,  with  an  opening  price  of  4}^ 
cents  in  April  and  a  high  price  of  8  cents  in  October  and  November 
on  wheat  per  bushel  to  Buffalo.  Lake  and  rail  freights  were  also 
higher,  8^  cents  being  the  lowest  figure  and  20j4  cents  the  highest 
on  wheat  per  bushel  to  New  York.  All  rail  freights  on  the  con- 
trary averaged  somewhat  lower,  rate  wars  forcing  the  price  down 
to  15  cents  during  a  part  of  June  and  20  cents  being  the  ruling  rate 
from  March  until  August  on  grain  per  100  pounds  to  New  York. 
The  price  at  the  close  of  the  year,  however,  had  risen  to  40  cents. 
The  Secretary,  in  his  report,  stated  that  the  trunk  lines  were  prac- 
tically consolidated  into  a  giant  monopoly  with  competition  elimi- 
nated.    This  was  thought  better,  however,  for  the  grain  trade  in 


596  HISTORY  OF  THE  BOARD  OF  TRADE  [1879] 

general  than  the  bitter  railroad  wars,  with  their  rebates  and  dis- 
criminations in  favor  of  large  shippers. 

Perhaps  there  is  no  better  way  of  ending  the  history  of  this 
eventful  year  than  by  quoting  the  account  of  the  very  human  festiv- 
ities with  which  the  juniors  of  the  Board  closed  the  work  of  the 
year  on  New  Year's  eve  as  related  by  the  daily  press : 

"Following  the  custom  of  former  years,  the  younger  members 
of  the  Board  of  Trade  determined  to  play  farewell  to  the  expiring 
year  in  a  calithumpian  manner.  Nevins  &  Dean's  band  was  engaged 
to  furnish  the  music,  and  a  good  time  was  anticipated  by  the 
organizers  of  the  scheme,  but  they  counted  without  their  host. 
When  the  doors  of  the  Board  were  opened  at  3  o'clock  the  hall  was 
virtually  confiscated  by  the  settling  clerks,  errand  boys  and  mes- 
sengers, as  noisy  a  lot  of  cubs  as  was  ever  corralled  within  the  four 
walls  of  a  building.  The  gallery  was  crowded  to  its  capacity  with 
ladies  and  gentlemen,  who  had  anticipated  a  spectacle,  not  manly, 
it  is  true,  but  full  of  fun.  They,  too,  were  disappointed.  Promptly 
on  the  opening  of  the  door  the  band  struck  up  "Marching  Through 
Georgia,"  which  was  loudly  cheered  at  its  finish,  then  appeared 
Charlie  Daniels,  "the  politest  man  on  the  Board" ;  Sam  Adams, 
"Young"  Oakford,  Roche's  settling  clerk,  and  Johnny  Jones, 
the  confidential  bookkeper  for  Scott  Linn,  garnished  with  white 
plug  hats  of  last  year's  growth.  These  were  unceremoniously 
knocked  from  the  caputs  of  their  wearers,  and  for  a  few  moments 
did  duty  as  footballs.  In  the  meantime  the  mischievous  cubs  had 
ransacked  the  sample  bottles  and  began  throwing  bags  and  boxes 
of  flour  and  grain.  Numerous  overcoats  were  dusted  to  the  disgust 
of  their  owners  and  considerable  "kicking"  was  indulged  in.  When 
a  bag  of  flour  struck  the  E  flat  player  square  in  the  bugle  there  was 
a  grand  kick.  The  band  refused  to  play  unless  the  unseemly  exhibi- 
tion was  stopped.  Nothing  could  be  done  to  repress  the  boys.  It 
was  their  day  out,  and  they  were  determined  to  enjoy  it.  Becom- 
ing completely  disgusted,  the  band  packed  up  its  instruments,  and 
in  Indian  file,  lead  by  Billie  Nevins,  slowly  took  their  leave.  This 
was  the  signal  for  a  general  hegira,  and  at  half  past  four  the  hall 
was  deserted.  The  band  subsequently  assembled  in  the.  rooms  of 
the  Call  Board,  and  treated  its  members  to  a  spirited  selection  of 
patriotic  and  other  airs,  which  were  much  enjoyed." 


